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SAIL: Loss at EBITDA Level Due to Higher Raw Material Cost - Views on News from Equitymaster
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  • Jun 12, 2017 - SAIL: Loss at EBITDA Level Due to Higher Raw Material Cost

SAIL: Loss at EBITDA Level Due to Higher Raw Material Cost
Jun 12, 2017

SAIL has announced the fourth quarter results of financial year 2016-2017 (4QFY17). While the topline increased by 11.7% YoY, the bottomline reported a loss Rs 7.7 billion during the quarter.

Performance summary:
  • Income from operations increased by 11.7% YoY during 4QFY17. This is on the back of an increase in sales realisation (up 22% YoY) However, the sales volumes declined on YoY basis by 8.5% to 3.45 MT. This volume decline is on the back of subdued offtake in January and February 2017.
  • The company registered a negative EBITDA of Rs 2.64 billion during the quarter. This is on the back of an increase in raw material cost (up 18.6% YoY). This is primarily due to high coking coal price. Employee cost declined by 16.7% YoY on the back of implementation of the voluntary retirement scheme (VRS).
  • Other income increased during this quarter by 67.3% YoY.
  • Depreciation declined during this quarter by 16.6% YoY. On the other hand, Interest cost saw an increase of 10.2% YoY.
  • Subsequently, the company reported a net loss of Rs 7.7 billion during the quarter.

    Financial Snapshot
    (Rs m) 4QFY16 4QFY17 Change FY16 FY17 Change
    Total Income 113,612 126,905 11.7% 390,984 445,018 13.8%
    Total Expenses 122,652 129,549 5.6% 420,010 444,347 13.6%
    Operating profit (EBITDA) -9,040 -2,644   -29,025 671  
    Operating profit margin (%) -8.0% -2.1%   -7.4% 0.2%  
    Other income 1,850 3,094 67.3% 5,290 4,495 -15.0%
    Interest 6,532 7,202 10.2% 23,005 25,278 9.9%
    Depreciation 8,918 7,439 -16.6% 24,044 26,816 11.5%
    Profit before tax & exceptional items -22,641 -14,192   -70,784 -46,929  
    Exceptional Item 0 3   0 -2,167.4  
    Tax -10,794.20 -6,475.30   -29,377 -19,595  
    Net Profit Before Shares of Associates -11,846 -7,713   -41,406 -29,501  
    Shares of Associates       -359 1,939.20  
    Net Profit       -41,765 -27,562  
    Net profit margin (%) -10.4% -6.1%   -10.6% -6.6%  
    No. of shares (m)         4131  
    Basic diluted earnings per share (Rs) ^         -6.7  
    P/E ratio (x) *         N.A  

    * On trailing 12 month basis

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