Essar Steel's Total Income at Rs. 929.84 cr.; Operating Profit at Rs. 205.52 cr. for the quarter ended March 31, 2003
April 30, 2003
Financial Performance
Essar Steel Limited (ESL) has ended January - March 2003 quarter with a higher turnover, operating profit and record level of exports. ESL has registered a total Income of Rs.929.84 crore for the quarter ended March 31, 2003 compared to Rs.495.88 crore in the corresponding period of the previous year.
During the period under review, the company's operating profit stood at Rs.205.52 crore compared to Rs.52.82 crore in the corresponding quarter of the previous year. After providing for finance costs of Rs.137.36 crore (Rs.234.70 crore in the previous corresponding quarter), the company recorded a healthy cash profit of Rs.68.16 crore compared to a cash loss of Rs.181.88 crore in the corresponding quarter of last year. After providing for depreciation of Rs.96.19 cr. (Rs. 104.58 cr.), the Company has posted a reduced loss at Rs. 36.35 cr as against a loss of Rs. 186.39 cr. in the corresponding period of previous year.
Operating Performance
The sales grew in volume terms by 32% at 4.73 lakh tonnes compared to 3.60 lakh tonnes in the previous year. Exports have registered a rise of 319% at 2.46 lakh tonnes as against 0.59 lakh tonnes in the corresponding period of the last year.
The company had a healthy growth in its production in the last quarter ended March 2003. The production of hot rolled coils has grown over 35% at 4.77 lakh tonnes (3.53 lakh tonnes in the previous year) resulting in a capacity utilisation of 95.4%.
The increase in cost of raw materials like metallic, power and fuel costs impacted the EBIDTA margin of the company. However, the company could offset partially the negative impact through increased production and higher sales realisation.
Corporate Debt restructuring
The Corporate Debt Restructuring scheme has been approved with effective from 1 October 2002 and interest has been provided at the rate approved by CDR. On completion, the scheme is expected to improve the company's cashflows, help restructure its balance sheet and enable it to recover from the industry recession.
Market Outlook
During the current quarter, the market has witnessed softening of steel prices globally after a rapid rise during the last year. This will also have an impact on domestic prices. The sudden stoppage of orders from China has led to an export surplus, which are yet to find alternate markets. In addition, Russia continues to be active in the European market. This has resulted in a price instability. However, value-added grades still fetch higher realisation. The current expectations are that the prices might stabilise in a couple of months once China announces its new quota by end May.
CORPORATE