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Steel Authority Of India
Muted F4Q11 Results Due to
Stunted Sales Vols; Stay EW
Quick Comment – Impact on our views: We remain
EW on SAIL due to possible near-term hurdles like
timing of commissioning of its new facilities, coal cost
trends, and confusion related to the timing of the
company’s plans for an FPO.
SAIL reported F4Q11 PAT of Rs15.1bn, up 36% QoQ
but down 28% YoY. EBITDA was Rs21.2bn, up 30%
QoQ although 32% below our estimate mainly due to
sluggish sales volumes at 9% lower than production
volumes. EBITDA per ton at US$150 was 35% higher
QoQ, although it was 25% lower than our expectation.
What We Liked – Good Operating Performance
Realizations grew smartly, by 11% QoQ, to Rs38,113/t
and were marginally ahead of our estimate.
Raw material cost per ton was 8% below MSe and
slightly lower sequentially.
Production was up 3% QoQ and 11% QoQ to 3.43mt,
almost hitting the earlier peak of 3.44mt in F4Q08.
What We Did Not like – Muted Sales Volumes
Sales volumes fell 4% QoQ and 7% YoY, to some extent
due to steep price increases taken, and meaningful steel
imports into India in the early parts of the quarter.
However, the unsold volumes in the quarter will aid
earnings in the next one to two quarters, we feel.
Staff costs rose 10% QoQ to Rs20.5bn.
Other Highlights
The company intends do a further public offering of
equity shares in F2012. Capex in F4Q11 and F2011 was
Rs32.8bn and Rs112.8bn, respectively.Net debt to
equity at end-F2011 was 8%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Steel Authority Of India
Muted F4Q11 Results Due to
Stunted Sales Vols; Stay EW
Quick Comment – Impact on our views: We remain
EW on SAIL due to possible near-term hurdles like
timing of commissioning of its new facilities, coal cost
trends, and confusion related to the timing of the
company’s plans for an FPO.
SAIL reported F4Q11 PAT of Rs15.1bn, up 36% QoQ
but down 28% YoY. EBITDA was Rs21.2bn, up 30%
QoQ although 32% below our estimate mainly due to
sluggish sales volumes at 9% lower than production
volumes. EBITDA per ton at US$150 was 35% higher
QoQ, although it was 25% lower than our expectation.
What We Liked – Good Operating Performance
Realizations grew smartly, by 11% QoQ, to Rs38,113/t
and were marginally ahead of our estimate.
Raw material cost per ton was 8% below MSe and
slightly lower sequentially.
Production was up 3% QoQ and 11% QoQ to 3.43mt,
almost hitting the earlier peak of 3.44mt in F4Q08.
What We Did Not like – Muted Sales Volumes
Sales volumes fell 4% QoQ and 7% YoY, to some extent
due to steep price increases taken, and meaningful steel
imports into India in the early parts of the quarter.
However, the unsold volumes in the quarter will aid
earnings in the next one to two quarters, we feel.
Staff costs rose 10% QoQ to Rs20.5bn.
Other Highlights
The company intends do a further public offering of
equity shares in F2012. Capex in F4Q11 and F2011 was
Rs32.8bn and Rs112.8bn, respectively.Net debt to
equity at end-F2011 was 8%.
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