SAIL clocks net loss of Rs 801 crore on higher coal prices

New Delhi: Domestic steel major SAIL on Friday saw its standalone net loss widen to Rs 801.38 crore for the June quarter due to higher coal prices and expenses.

The steelmaker had clocked a net loss after tax of Rs 535.52 crore in the corresponding quarter of 2016-17, the company said in a BSE filing.

"In the Q1 FY2017-18, the company bore an impact of 115 per cent higher price on account of imported coal and 25 per cent higher price on account of indigenous coal over the corresponding period last year, pushing down the overall profitability margin despite a 14 per cent higher Net Sales Realisations (NSR) over same quarter last year," the company said in a statement.

It also said that during the quarter, due to Cyclone Debbie the supplies of coking coal from Australia were adversely impacted, resulting in lower production volumes of saleable steel.

Total standalone income of the Maharatna firm rose by 25.39 per cent to Rs 13,072.77 crore in April-June this fiscal from Rs 10,424.95 crore during the same quarter in 2016-17.

Its total expenses rose by 27.03 per cent to Rs 14,349.89 crore in the quarter under review as against 11,296.16 crore in the year-ago period.

With focus on ramping up of new mills and enriched product mix from the new facilities, SAIL said it continued to remain EBITDA positive at Rs 23 crore.

SAIL Chairman P K Singh said, "We are maintaining positive EBITDA inspite of the challenging situation in the steel sector and that shows the collective resolve of the company."

"With the imported coal availability stabilising and focus on ramping up the new units, the situation will improve in coming quarters. We have drastically reduced production from inefficient units and are optimising the coal blend in operations to reduce costs. These steps will surely translate into improved financials going forward," he added.

The company said during the quarter, total sales volume at 3.028 Million Tonnes (MT) recorded a 9 per cent growth over the corresponding period last fiscal. The company's sales of finished steel were also higher by 4.12 lakh tonnes during Q1 FY18 as compared to Q1 FY17, recording a 19 per cent growth.

It said on improving market sentiments, it is rapidly ramping up its new mills towards the rated capacities and focussing on marketing initiatives so as to increase its market share for Company's new and enriched product basket including universal structural, rails, wire rods, plates etc.

The company is making effort for cost optimisation,  it said adding, manpower optimisation initiatives are being implemented in right earnest for effective utilisation of human resources.

The company also said it is focussing on Internal Communication strategy under which large group interactions in the presence of top management are being organised.

Shares of the company closed at Rs 56.55 apiece on the BSE, down 3.99 per cent over the previous close.