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SAIL: Bleeding Continues at EBITDA Level... - Views on News from Equitymaster
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SAIL: Bleeding Continues at EBITDA Level...
Aug 28, 2017

SAIL has announced the first quarter results of the financial year 2017-2018 (1QFY18). While the topline increased by 25.3% YoY, the bottomline reported a loss Rs 8 billion during the quarter.

Performance summary:
  • Income from operations increased by 25.3% YoY during 1QFY18. This is on the back of an increase in sales realisation which increased by 17% YoY. Similarly, the sales volumes also increased by 7.1% YoY.
  • The company registered a negative EBITDA of Rs 839 million during the quarter. This is on the back of an increase in raw material cost which increased sharply by 58% YoY. This is due to increased coking coal costs. On the other hand, employee cost declined by 15.3% YoY due to lower employee base with the VRS scheme and a write back of other benefits (including pension) of Rs 1.7 billion pertaining to executive employees of the company.
  • Other income was flat during the quarter. Depreciation increased by 15.7% YoY. On the other hand, Interest cost saw a marginal decline of 1% YoY.
  • Subsequently, the company reported a net loss of Rs 8 billion during the quarter.

    Financial Snapshot (Standalone)
    (Rs m) 1QFY17 1QFY18 Change
    Total Income 92,381 115,796 25.3%
    Total Expenses 90,043 116,635 26.3%
    Operating profit (EBITDA) 2,338 -839  
    Operating profit margin (%) 2.5% -0.7%  
    Other income 893 893 0.0%
    Interest 5941 5879 -1.0%
    Depreciation 6002 6947 15.7%
    Profit before tax & exceptional items -8,712 -12,771  
    Exceptional Item -542 -101  
    Tax -3899 -4859  
    Net Profit Before Shares of Associates -5,355 -8,014  
    Net profit margin (%) -5.8% -6.9%  
    No. of shares (m)   4131  
    Basic diluted earnings per share (Rs) ^   -7.5  
    P/E ratio (x) *   N.A  

    * On trailing 12 month basis

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