SAIL, Essar post record losses

Essar said though there has been an increase in the international prices, the effect of the same is yet to be felt. The developmental policies announced by government would translate into revival of the industry, Pande said adding that the activeinterest and support of the government to our restructuring needs will have a salutary impact on company’s financials by the year end. SAIL also attributed the rise in losses to increased capital charges.

The capital charges increased by Rs 320 crore during the period. Interest charges stood at Rs 1,119 crore up by 23 per cent while depreciation charges stood at Rs 616 crore up by 21 per cent.

To offset the increased capital charges and dip in sales realisation, the corporation laid a major thrust on cost cutting measures and managed to save Rs 360 crore during April-September period, he said. The domestic selling prices remained depressed due to the excess supply position despite marginal improvement in demand.

Compared to price levels prevailing in first half of 1998-99, the net price realisations in the first six months of the current fiscal fell by a steep nine per cent adversely affecting the financials of the company. The drop in sales realisation was by an average of Rs 1,100 pertonne.

However, in a slow growth market, SAIL managed to post a seven per cent rise in its domestic sales volume and doubled its export sales.

SAIL also absorbed an additional burden of Rs 70 crore during April-September 1999 on account of its voluntary retirement scheme (VRS) launched in June this year.

In line with the company’s priority to right-size its workforce, separations under VRS-99 were in excess of 13,000 employees in a span of five months ending October 1999, company release said.