SAIL posts sixth straight quarterly loss
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Mumbai: Steel Authority of India Ltd, the country’s top producer, booked a loss for the sixth straight quarter, almost in line with analyst estimates, as costs increased.
The company lost Rs7.3 billion ($108 million) in the three months through September compared with a shortfall of Rs11.1 billion a year ago, the company said in a statement on Thursday.
That compares with Rs7.6 billion estimated by 14 analysts in a Bloomberg survey. Sales climbed about 20% to Rs124.3 billion.
“The company is certain that it will be able to improve its physical and financial performance in future,” because of government measures to boost demand, efforts to reduce costs and improvements in productivity, SAIL said in a statement.
India has tightened curbs on cheaper imports from countries including China as domestic mills ramp up production on expectations that Prime Minister Narendra Modi will boost spending on infrastructure, roads and power. Modi’s move last month to scrap higher denominated currency may hurt local demand, limiting suppliers’ scope to increase prices, according to Jefferies India Pvt.
SAIL’s costs climbed 11% to Rs131.3 billion from the same quarter a year ago and the company also paid out Rs1.64 billion as voluntary retirement compensation to employees. For the six month period ended 30 September, the company reported a loss of Rs12.67 billion compared to a loss of Rs13.56 billion during the year earlier period.
The producer joins Tata Steel Ltd. in posting a negative result for the period partly on weaker product prices and as Tata’s operations in the UK remained a drag on earnings, while the nation’s second-largest producer JSW Steel Ltd reported a third straight profit on record output.
Shares of SAIL climbed 3.2% to Rs55.25 at close in Mumbai on Friday. The stock has climbed 14% this year, after plunging 41% in 2015, as government measures curb imports and prospects for domestic demand improve.
The mill is spending Rs40 billion this year on increasing capacity by 43% to 21.4 million metric tons by 2018, part of a longer term goal of achieving 50 million tons in the next decade.
Jindal Steel & Power Ltd also reported a loss in the quarter ended September, the New Delhi-based steelmaker said in a separate statement on Thursday. The shortfall was Rs7.46 billion compared with Rs9.1 billion a year earlier, it said. The company’s shares rose 1.5% at Rs74.20. Bloomberg