financial year 2006 07
TRANSCRIPT
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STEEL AUTHORITY OF INDIA LIMITED
Performance HighlightsPerformance Highlights 20062006 -- 0707
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Contents
Performance Highlights 2006-07
Steel Industry Outlook
SAILs Expansion Plans
CSR & Environment Management
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Performance Highlights 2006-07
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Record Turnover of Rs.39189 crore up 21%
Highest ever PBT Rs.9423 crore up 65%
PAT of Rs.6202 crore up 55%
EBDIT/SALES 32%
PAT / Net worth 36%
Debt / Equity Ratio : 0.24:1 (virtually debt-free, as short
term deposits exceed borrowings)
EPS Rs.15 up by Rs.5.30
Dividend 31% - Interim 16% and proposed final dividend 15%
Financial Highlights FY 07
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Quarter-wise Profit
21002164
2234
1386 1443 1471
1902
2925
0
500
1000
1500
2000
2500
3000
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
(Rupeesin
crore)
PBT
PAT
FY 2006-07
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Financial Highlights FY 07 : Q4January March 2007
Record Quarterly Turnover of Rs.11534 crore up 14 % over CPLY
EBDIT of Rs.3262 crore up 96% over CPLY
PBT of Rs.2925 crore up 133% over CPLY
PAT of Rs.1902 crore up by 72% over CPLY
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Performance Highlights FY 07
Highest ever saleable steel production of 12.6 million tonnes (MT)
- growth of over 4%
Avg. Capacity utilisation (saleable steel) about 114%
Production growth in high value/special quality steels 16%
Production through Concast up by 5%
Lowest Energy consumption of 7.16 Gcal/TCS
Coke Rate lower by 2 kg per tonne of hot metal
BF productivity up from 1.46 to 1.50 tonnes/cub. m/day
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10.411.0 11.0
12.112.6
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
FY 03 FY 04 FY 05 FY06 FY07
Saleable Steel (Million Tonnes)
Finished Steel
FY07FY06FY05FY04FY03
8184 828180
% of
Sal.
Steel
Highest saleable steel and finished steel production in 2006-07.
RecordProduction
Production Performance
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PIPES
0.7%
RAILWAY MATERIALS
8%
STRUCTURALS
6.2%
CR COILS / SHEETS
8.7%
COATED PRODUCTS
2.5%
ROUNDS / BARS10.2%
SEMIS
18.8%
PLATES
20.2%
HR COILS / SHEETS
24.1%
Product Mix Of Saleable Steel Production FY 2007
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Energy Consumption (Gcal/tcs)
7.167.24
7.29
7.467.50
6.50
7.00
7.50
8.00
FY 03 FY 04 FY 05 FY06 FY07
6.60
7.347.63
7.93
8.32
4.00
5.00
6.00
7.00
8.00
9.00
FY 03 FY 04 FY 05 FY 06 FY07
Concast Production (Million Tonnes)
Techno-Economic Improvements
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538
542
536
543541
520
530
540
550
560
FY 03 FY 04 FY 05 FY 06 FY 07
Coke Rate (kg/thm)
Techno-Economic Improvements
516
506
492
478
460
450
460
470
480
490
500
510
520
530
FY 03 FY 04 FY 05 FY 06 FY 07
Sp. Power Cons. (Kwh/tss)
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132973
138211
126,857
131,910137,496
147,601
156,719159,940
174,736 13.5013.47
12.1012.08
11.30
10.6810.54
9.9910.07
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07
Manpow
er(Nos.)
8.00
9.00
10.00
11.00
12.00
13.00
14.00
Production(milliontonnes)
Manpower Crude Steel Production
Manpower Vs Production
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19207
24178
3180532280
39189
15000
20000
25000
30000
35000
40000
45000
------RsCrore------
FY 03 FY 04 FY 05 FY 06 FY 07
-------Year------
Sales Turnover
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9.2
9.5
10.3
10.7
11.4
8.5
9.5
10.5
11.5
FY 03 FY 04 FY 05 FY 06 FY 07
0.86
1.17
0.46
0.58 0.51
0.20
0.70
1.20
FY 03 FY 04 FY 05 FY06 FY 07
Domestic Sales (Million Tonne) Exports (Million Tonne)
FY 05 and FY 06 Includes ISP
Sales Volume
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New Product Development
Spring SteelSpring Steel Billets (SUP
11A)
High Speed RailVanadium Micro-Alloyed
Rail
Coastal RailwaysCu-Cr Rail
Diesel Loco WheelsS Profile Loco Wheels
ChainsMC12 HR Coil
LPG CylinderEN Series HR Coil
Tunnel ConstructionRockbolt TMT
Earthquake Resistant ConstructionHCR-EQR TMT
ApplicationNew Products
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2512
6817
4013
6202
0
1000
2000
3000
4000
5000
6000
7000
FY 03 FY 04 FY 05 FY 06 FY 07
Net Profit after tax/Loss [Rs./Crs.]
Profitability
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62.9
35.6
47.2
26.5 32.3
29.3
5.7
12.96.5
11.321.6
38.6
0
10
20
30
40
5060
70
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07
%
EBDIT /Cap. Employed EBDIT/Sales
Profitability Ratio
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1000
3000
5000
7000
9000
11000
13000
15000
FY 03 FY 04 FY 05 FY 06 FY 07
100
300
500
700
900
1100
1300
1500
1700Borrowings
Interest Cost
0.35
FY 06
0.240.581.876.50D/E Ratio
FY 07FY 05FY 04FY 03Year
SAILs market borrowings stood at Rs.4181 crore, a reduction of Rs.117 crore from the
previous year. Interest outgo was also lower by Rs.136 crore during FY 07.
Borrowings(Rs.
InCro
re)
Interest
Cost(Rs.
InCrore)
Reduction in Borrowings
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Sensex(Points)
SharePrice
(Rs)
Month
Closing Share Price & Sensex as on the last day of the month
Performance of SAIL Share price vis--vis BSE Sensex
108.15
114.1
83.3082.30 79.70
81.2
70.25 72.2
77.95
86.387.65
89.2
108.9513696.31
13786.9112961.9
12454.42
11699.05
13072.1
11,279.96
14090.92
10743.88
10609.25
11851.93
10398.61
12938.09
10.00
30.00
50.00
70.00
90.00
110.00
130.00
Mar-0
6
Apr-0
6
May-06
Jun-06
Jul-0
6
Aug-06
Sep-06
Oct-0
6
Nov-06
Dec-06
Jan-07
Feb-07
Mar-0
7
2000
4000
6000
8000
10000
12000
14000
16000
SAIL
SENSEX
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3635
13341
26000
34406
47128
3000
8000
13000
18000
23000
2800033000
38000
43000
48000
53000
58000
------RsCr
ore------
FY 03 FY 04 FY 05 FY 06 FY 07
-------Year------
Market CapitalizationMarket Cap crossed level of
Rs.50,000 crore on 11-4-2007
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1280*31*15.0*16.02006-07
33
20
Total
%
1363
826
Dividend
(Rs. in Crs)
18.0
7.5
Final
%
12.52005-06
15.02004-05
Interim %Year
Dividend Policy of SAIL governed by GoI Guidelines of September
2004
All profit making Public Sector Enterprises (other than Oil
Petroleum and other infrastructure sectors) shall declare a
minimum dividend on equity of 20% or a minimum dividend payout
of 20% of post tax profit, whichever is higher.
Dividend Policy
* Final Dividend For FY 2006-07 recommended by SAIL Board
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Projects
BF 2 upgradation at ISPBloom caster at DSP
Mae-West Block modification at BSLReplacement of Turbogenerator/B strand at WRM
BSP
CDI in BF at DSP, RSP & BSLCast house slag granulation
plant no. 7 at BF-4 BSL
Hot metal desulphurization at BSPAOD & EAF at ASP
Slab caster & RH degasser at SMS-2 at BSPUp gradation of BF-7 at BSP
COB at RSP, BSL & BSPNormalizing furnace at Plate
Mill RSP
Project under implementationProject Commissioned
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Steel Industry Outlook
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Global Steel Scenario
1240 Million Tonne Crude Steel Production in 2006, a growth of 8.8% over
2005. China accounted for most of the incremental production.
Further growth in production/consumption is expected to come from BRICcountries (Brazil, Russia, India and China).
Cost/Availability of raw materials (mainly iron ore & coal) a major challenge.
Region wise crude steel production as per IISI (in Million Tonne) is as under:
5.9%11.1198.4EU
8.8%99.91239.5World
3.3%3.7116.2Japan
18.5%65.4418.8China
7.6%3.144.0India
0.0%0.045.3South America
3.0%3.9131.5North America
Growth (%)Production Growth Over 20052006Region
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Global Steel Scenario
419 476575
821856
907
100
300
500
700
900
1100
1300
15001700
2006 2010 2015
Rest of the WorldChina
Source : IISI / WSD
World Crude Steel Production
Million
Tonne 1240 1332
1482
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Overview of Indian Steel Industry
7th largest steel producing nation in the world with crude steel production
of 44 million tonne in 2006
Apparent consumption of finished steel in FY 07 - approx. 44 million tonne,
growth of 11% over FY 06.
Per capita steel consumption: approx. 38 kg
Finished steel exports in 2006-07: approx. 4.75 million tonne
Imports at 4.1 million tonne in FY 07 catching up fast with exports due to
buoyant domestic demand
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Overview of Indian Steel Industry
Crude Steel Production 2006-07
8.4ESSAR, ISPAT
& JSWL
14.5Others
45.1TOTAL
06-07
(Million tonne)
Company
3.5RINL
5.2TISCO
13.5SAIL
Source: JPC / Internal
TISCO
11%RINL
8%
SAIL
30%
ESSAR,ISPAT &
JSWL
19%
OTHERS
32%
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Indian Steel Industry
Steadily increasing consumption of steel in the country
Finished Steel Production, Consumption, Export & Import
Source: JPC
34
29
37
31
40
34
45
39
49
44
10
25
40
55
MillionTon
ne
FY 03 FY 04 FY 05 FY06 FY07
5
2
5
2
4
2
4
4
5
4
1
2
3
4
5
M
illion
Tonne
FY 03 FY 04 FY 05 FY06 FY07
ConsumptionProduction
Imports
Exports
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Source: JPC/PRIMARY
45.1 (Mn T)
MAJOR PRODUCERS
SAIL
TATA STEEL
RINL
ESSAR STEEL
JSW STEEL
ISPAT IND.
180~200 (Mn T)
MAJOR PRODUCERS
SAIL
TATA STEEL
RINL
ESSAR STEEL
JSW STEEL
ISPAT IND.
( + )
MITTAL STEEL
POSCO
2006-07 2019-20 (P)
CAGR
@1
1%
~12%
Indian Steel Industry Today and Tomorrow
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Indian Steel Industry Today and Tomorrow
Source: JPC/CRISIL/IISI
44
82
180
10
30
50
70
90
110
130
150
170
190
FY 2007 FY 2012 FY 2020
Demand Projection of Finished Steel India
Growth Trajectory of 11 % CAGR
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SAILs Expansion Plans
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SAILs Expansion Plan
Million Tonne
Particulars
10062Continuous Casting Production (% OF CS)
10078Production through BOF (% OF CS)
Saleable Steel
Crude Steel
Hot metal
2312.6
2413.5
2514.6
2010
(Plan)
2006-07
(Actual)
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Rs. In Crs.
1400
3000
17500
16500
0 5000 10000 15000 20000
Tenders to be issued
Tenders issued
Under execution
Completed
Investment Under Expansion Plan - 2010
Status of existing
Capital Schemes (Rs.38,400 cr.)
under expansion plan
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RAW MATERIALS
IRON ORE LINKAGES
Existing Mines +
Raoghat, Chiria &
Taldih + Thakurani
100~ 602020
Existing Mines +
Raoghat, Chiria &Taldih + Thakurani
43252010
Existing Mines2514.62006-07
Linkages of Iron OreIron Ore RequirementHot Metal ProductionYear
Mtpa
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Technological Shift post Expansion Plan
100%PartlyDesulphurization of Hot Metal
Full coveragePartial coverageAuxiliary Fuel Injection in BF
YesNoTop Pressure Recovery
Turbine
YesNoCoke Dry Quenching
YesNoPelletisation Plant
100%62%CC Route
100%78%BOF Steel making
After ExpansionCurrent StatusTechnology
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GoI in principle approval accorded for merger of NINL, MEL &BRL with SAIL.
Agreement concluded for setting up of cement plant in JointVenture with M/s JP Associates for utilising BF slag of BhilaiSteel Plant
Process under way for setting up a slag based cement Plantusing BF slag at BSL in the frame work of a JV
JV Companies supplying captive power to SAIL to augment theircapacities by setting up 500 MW plant additions each at BSP &BSL
Mergers & Acquisition & New JVs
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CSR & Environment Management
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Corporate Social Responsibility
SAIL unparalleled in community welfare promotion
Education : Opened 200 schools to provide education to 1,22,000children. In addition supports other public schools
Health : Over 2 million people served by SAIL hospitals 19 in number(including 4 superspeciality), 39 primary health centres, 18
reproductive and child health centres
Other Initiatives : Access to potable drinking water to 100,000 personsevery year. Construction of 40 kms of pucca roads every year. Supportfor extending benefits to physically challenged. Nurturing young talent
through specialized academies promoting sports.
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Corporate Social Responsibility
Major schemes in 2006-07:
Community care :
Benefits to the SC/ST children through scholarships
Adoption of tribal children at Bhilai and at Bokaro for free education,boarding & lodging facilities, etc.
Preserving National heritage :
SAIL has adopted five monuments in Lodi Gardens, New Delhi forpreserving and maintaining in association with Archeological Survey ofIndia.
AIDS Awareness Program :
As a inter-sectoral collaborator with NACO, Ministry of Health for HIVAIDS programme, SAIL has covered around 6 lacs persons in the AIDSawareness programmes since 1999-2000.
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Corporate Social Responsibility
New projects identified:
Model Steel villages
17 villages have been adopted across 7 states.
Blue print being made including measures to be taken w.r.t. Medical &
Health Services, Education, employment generation, use of steel for
storage/construction/bullock carts, etc.
Literacy :
SAILs continuous efforts to improve literacy level has resulted in
literacy rate in steel townships reaching the range of 749-796 per
1000 against the national average of 520 (comparative analysis 2001).
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Corporate Social Responsibility
New projects identified:
Mid-day meal : Scheme to provide Mid-day meal to around 50,000 school
children in and around Bhilai Steel Plant, in association with a NGO
(Akshaya Patra Foundation) has been worked out.
Health care : Through CARE, 4 mobile vans to be deployed in Chiria area,covering 156 villages with more than 1 lakh population.
Education : A special 3-year project being planned in association with a
reputed NGO (Oxfam trust) for the mines, covering :
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Environment Management
Air emission reduced to 2.2 kg/tcs, reduction of 15% w.r.t. 2005-06(1995-96 : 10 Kg/tcs).
Solid waste utilization increased to 75 %, an improvement of 4%.
Water consumption reduced to 5.31 M3/tcs, an improvement of 5%.
3 lakh trees planted, cumulative plantation - over 13.5 million trees.
Restored over 150 acres of degraded mining area at Purnapani underthe Delhi University SAIL agreement.
Pisciculture has been taken up in the abandoned mining areas at Purnapaniand 50,000 fishlings released in quarry water .
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Accolades
41 employees awarded with Vishwakarma Rashtriya Puraskar - year 2005
one third of total awards conferred amongst employees of all PSUs as well
as private sector in the country.
10 employees were awarded Sharam Awards for the year 2004.
SCOPE Meritorious Award for Environmental Excellence and SustainableDevelopment for the year 2004-05.
First ever Sustainability Awards -2006 instituted by CII to recognize excellencein social, economic and environmental performance, bagged by Bhilai SteelPlant (BSP) of SAIL.
Bhilai also won Golden Peacock : Eco Innovation Award-2006.
National sustainability Award year 2006 1st prize to Salem Steel Plant byIndian Institute of Metals amongst secondary steel /alloy steel plants category.
Honble Vice President of India presented National Safety Awards for the year2002 and 2003 to Raw Materials Division on 14th February 07.
Rajiv Gandhi National Quality Award, 2006 - Best of all category to BSP.
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Abbreviations used
ASP Alloy Steel Plant
BF Blast Furnace
BOF Basic Oxygen Furnace
BSL Bokaro Steel LimitedBSOs Branch Sales Offices
BSP Bhilai Steel Plant
CCO Customer Contact Office
CDI Coal Dust Injection
CS Crude SteelDSP Durgapur Steel Plant
EBDIT Earnings Before Depreciation Interest & Taxes
G.Cal/tcs Giga Calories per tonne of Crude Steel
GoI Government of India
IISI International Iron & Steel InstituteISP IISCO Steel Plant
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Abbreviations used
JPC Joint Plant Committee
Kg/thm Kilo Gram Per Tonne of Hot Metal
MEL Maharashtra Elektrosmelt Limited
MT Million TonneMtpa Million Tonne Per Annum
PAT Profit After Tax
PBT Profit Before Tax
RDCIS Research & Development Centre for Iron & Steel
RINL Rashtriya Ispat Nigam LimitedRSP Rourkela Steel Plant
SSP Salem Steel Plant
VISL Visvesvaraya Iron & Steel Limited
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Statements / Data which do not relate to SAIL and are used / made in this
presentation are from sources which are considered reliable and Company cannot
be held for its authenticity.
Further, statement describing the Companys projections, estimates, expectations
are forward looking statements within the meaning of applicable securities laws
and regulations. Actual results may differ materially from those expressed
depending on the circumstances / situations.
Major factors that could affect the Companys operations include, among others,
economic conditions affecting demand / supply and prices in the domestic and
global markets in which the Company operates, changes in Government
regulations, tax laws and other statutes etc.
Disclaimer