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Sail records 74 per cent drop in net profit
Reflecting the overall decline in demand in the steel sector, Steel Authority of India Limited (Sail) has recorded a 74 per cent drop in net profit during 1997-98 to touch Rs 133 crore as against Rs 515 crore the previous year. The company attributed the southward movement in profits to high depreciation and interest cost. The board of directors met on Friday and recommended a 31 per cent dividend for the year which works out to Rs 41.30 crore. However, riding on higher sales, increase in price realisation, significant savings from cost cutting measures and an increase in market share, Sail registered operating profits of Rs 2497 crore during the year as against Rs 2458 crore in 1996-97. In a market characterised by demand crunch, increasing domestic competition and dumping of steel, the company's sales turnover recorded a 3.6 per cent increase during the year at Rs 14,624 crore. Export turnover touched Rs 1087 crore, thereby registering a 69 per cent growth. Price realisations on total sales made, although higher, came under tremendous pressure due to slack market
conditions and onslaught of cheap imports.