Net profit may decline severely for SAIL

Net profit may decline severely for SAIL

By agencies   |   Friday, 27 January 2006, 08:00 Hrs
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NEW DELHI: Public Sector steel behemoth Steel Authority of India Limited (SAIL) may see a steep decline in its net profits of the third quarter with the prices of the commodity falling by about 30 percent since April last.

Analysts estimate its profits to slump to as low as $1.36 million in third quarter ended on December, 2005, almost half of what it recorded in second quarter at $2.56 million.

However, SAIL Chairman, V S Jain said, “Prices have been under pressure but now there is stability.” Most of SAIL's plants have been operating at over capacity of about 108 percent and this shows a healthy picture of the corporation, he added and decline to comment on analysts forecast.

Steel majors world over have seen decline in their profits with their margins under pressure on account of point to point falling flat of products prices by 30 percent in April-December at $568.18 per tone in December, 2005 from $795.45 a tone in April last year.

In line with the industry trend, Tata Steel also reported over 15 percent decline in the net profit for the third quarter of the current financial year. Korean steel Posco also felt the pressure of falling prices in the last nine months with a steep fall in profits.

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