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SAIL: Good Performance at EBITDA Level, Headwinds in the Offing - Views on News from Equitymaster
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  • Dec 21, 2016 - SAIL: Good Performance at EBITDA Level, Headwinds in the Offing

SAIL: Good Performance at EBITDA Level, Headwinds in the Offing
Dec 21, 2016

SAIL has announced the second quarter results of financial year 2016-2017 (2QFY17). While the topline increased by 21.4% YoY, the bottomline reported a loss Rs 7.31 billion during the quarter.

Performance summary:
  • Income from operations increased by 21.4% YoY during 2QFY17. This is on the back of an increase in salable steel sales quantity which has increased by 33% YoY. However, this was partly offset by the net sales realisation (NSR) which stood at Rs 28,135/tonne as against the NSR of Rs 29,300/tonne in Q2FY16 and Rs 29,732/tonne in Q1FY17. The flat realisations during the quarter stood at Rs 28,056/tonne, while the realisations of the long stood at Rs 28,160/tonne.
  • The company registered an operating profit of Rs 1.11 billion during the quarter. This is on the back of softening of raw material prices and marginal reduction in employee cost.
  • Other income declined during this quarter by 31.3% YoY.
  • Depreciation and interest accelerated during this quarter and increased by 26% and 11.6% respectively. This is on the back of capitalisation of assets.
  • The company reported an exceptional item of Rs 1.6 billion. This is related to VRS (Voluntary Retirement compensation) taken by its employees during the quarter.
  • On the back of an increase in depreciation, interest cost and decline in other income, SAIL registered a net loss in 2QFY17.

    Financial Snapshot (Standalone)
    (Rs m) 2QFY16 2QFY17 Change 1HFY16 1HFY17 Change
    Total Income 92,475 112,256 21.4% 187,597 204,637 9.1%
    Total Expenses 101,764 111,142 9.2% 198,899 201,185 1.1%
    Operating profit (EBITDA) -9,288 1,114 112.0% -11,302 3,452 -130.5%
    Operating profit margin (%) -10.0% 1.0% -6.0% 1.7%
    Other income 992 682 -31.3% 3,049 1,574 -48.4%
    Interest 5400 6028 11.6% 9,105 11,968 31.5%
    Depreciation 5284 6659 26.0% 8,618 12,661 46.9%
    Profit before tax & exceptional items -18,981 -10,890 42.6% -25,976 -19,603 24.5%
    Exceptional Item -1,640.10 -2,182
    Tax -7,900.20 -5,214.70 34.0% -12,200 -9,114 25.3%
    Net Profit -11,080 -7,316 34.0% -13,776 -12,671 8.0%
    Net profit margin (%) -12.0% -6.5% -7.3% -6.2%
    No. of shares (m) 4131
    Basic diluted earnings per share (Rs) ^ -9.7
    P/E ratio (x) * N.A

    * On trailing 12 month basis

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Dec 12, 2017 03:33 PM

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