financial results for Q1 financial year ’24 of SAIL 8/09/2023
- The global economy continues to be impacted adversely due to
inflationary pressures and the monetary tightening policy by central banks across the globe. The hopes that emerged from the opening of the Chinese economy have also not been fulfilled. - According to the World Steel Association, global steel output in the first half of 2023 declined by 1.1% compared to the same period in 2022. However, the association’s April 2023 short-term outlook projects that demand for steel will grow by 2.3% in 2023 and 1.7% in 2024.
- The production target for this year is 19 million tonnes, and capex target is INR6,800 crores
- The first quarter of the financial year 2023-2024 saw a 7% growth in hot metal production, from 4.69 million tonnes in the previous quarter (CPLY) to 5.04 million tonnes. Crude steel production also grew by 8%, from 4.33 million tonnes to 4.67 million tonnes. Saleable steel production increased by 8% as well, from 4.08 million tonnes to 4.40 million tonnes.
- In terms of marketing, sales volume grew by 23%, from 3.15 million tonnes to 3.88 million tonnes. Domestic sales were particularly strong, increasing by 25% from 2.99 million tonnes to 3.74 million tonnes. However, exports declined by 14%, from 0.17 million tonnes to 0.14 million tonnes.
- strong growth in all major production and marketing metrics. The sales turnover grew by a marginal 1% over the previous quarter (CPLY), to INR24,093 crores. This is the best-ever showing for the first quarter. However, profitability declined due to the declining NSR (Net Selling realization) and the increase in coking coal prices. EBITDA stood at INR2,090 crores, PBT at INR202 crores, and PAT at INR152 crores.
- The decline in exports is a bit concerning, but it is still early in the financial year and exports could pick up in the coming quarters.
The company has made significant progress in environmental conservation over the years by focusing on reducing its carbon footprint. In the first quarter of the financial year 2023-2024, the specific CO2 emission was reduced to 2.48 tonnes per tonne of crude sheet. This is a 20% reduction from the previous year.
The company has also made progress in solid waste utilization. In the first quarter of the financial year 2023-2024, solid waste utilization was in excess of 100%. This means that the company was able to recycle or reuse more solid waste than it generated.