Steel Authority of India Profit Falls on Lower Prices

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2009

Steel Authority of India Ltd., the nation’s second-biggest producer, reported a 17 percent drop in second-quarter profit and sales because of lower prices.
Net income declined to 16.6 billion rupees ($352 million) in the three months ended Sept. 30 from 20.09 billion rupees a year earlier, the New Delhi-based company said today in a statement. Sales fell to 100.4 billion rupees.
Indian steel prices fell almost 35 percent from a year ago, lowering earnings at local steelmakers. Tata Steel Ltd., India’s biggest producer, had a 50 percent drop in profit last quarter as earnings per ton were 25 percent lower than a year earlier.
Lower prices eroded earnings in the quarter as much as 30 billion rupees from a year earlier, Steel Authority Chairman S.K. Roongta told reporters today in New Delhi. The company may cut prices of flat products, which are susceptible to imports, by more than 500 rupees a ton starting next month, he said.
Steel Authority shares, which more than doubled this year, fell 1.7 percent to 164.55 rupees at the Mumbai close of trade.
Second-quarter volume sales rose 14 percent to more than 3 million tons, the company said.
Steel Authority has borrowed 36 billion rupees from market this financial year and will raise an additional 14 billion by the end of March 31, Roongta said.

Source: Bloomberg