State-run SAIL on Friday reported a standalone net loss of Rs 321.64 crore for the first quarter ended June 30, 2015 on account of lower realisation, higher royalty and power prices. The country's largest steel maker had clocked a net profit of Rs 530 crore in the year-ago period, it said in a BSE filing.
Standalone total income of the maharatna public sector undertaking fell by 16 percent to Rs 9,502.80 crore in the April-June quarter of this fiscal from Rs 11,341.20 crore in the same quarter of 2014-15.
SAIL's total expenses were lower at Rs 10,010.55 crore against Rs 10,619.32 crore in the reported quarter. On quarterly loss, SAIL said: "Apart from lower net sales realisation, increase in royalty on iron ore from September 1, 2014, increase in the purchased power rate etc also added to the losses."
Though domestic steel consumption grew about 7 percent in the first quarter of 2015-16, India witnessed an unprecedented increase in imports from countries like China, Japan, Korea, Russia, etc by 54 percent and this eroded a large market chunk of the domestically produced steel, it said in a statement.
"Lower exports from India, which fell by 31 percent in the first quarter, further affected the demand-supply balance," SAIL added.
All its steel plants - Bhilai, Rourkela, Durgapur, Bokaro, Salem, IISCO Steel, Alloy Steels, Visvesvaraya Steel & Iron - reported a decline in net sales in April-June period.
Except Bhilai and Durgapur steel plants, all other units of SAIL reported net loss in the June quarter. The company's shares touched a 52-week low of Rs 53.95 apiece in morning trade, but were trading 0.71 percent higher at Rs 56.50 per share in afternoon session and finally closed 0.53 percent up at Rs 56.40 apiece on the BSE.
The effect of the subdued quarterly performance has been partially offset by improvement in techno-economics such as lower coke rate with an improvement of 4 percent over CPLY, higher CDI usage with 2 percent improvement, lower energy consumption with 1 percent improvement over CPLY, lower store and spare consumption and lower imported coking coal price, SAIL said.
SAIL chairman and steel secretary Rakesh Singh, said: "Going forward, the government's support to domestic steel industry in the form of upward revision in customs duty on import is a step in the right direction and the industry is expected to get some support in ensuring stable price regime."
SAIL is following a strategy where in addition to increasing volumes and focused cost reduction, the thrust will be on maximising production of value-added products to get the benefit of increased infrastructure spending in the near future, he added.