India's largest steelmaker Steel Authority of India Ltd on Friday reported a steep 27.7% year-on-year decline in net profit for the January-March quarter at Rs 1,507 crore. High input costs, up by 26% during the quarter, ate into profitability.
The firm's turnover during the three month period also remained almost flat growing by 1% to Rs 13,136.5 crore during 2010-11. SAIL produced 3.43 million tonnes of saleable steel during the quarter, 5% more the year-ago period.
"On a yearly basis, rise in input costs impacted SAIL's financial performance in fiscal year 2011 by around Rs 3,718 crore, of which Rs 3,100 crore was on account of an increase in the price of imported coking coal alone," the firm said in a statement. "Hike in indigenous coal prices was to the tune of Rs 350 crore. Further, the company had to bear additional cost of Rs 2,200 crore on account of higher salaries & wages during 2010-11. These factors, and weakening market demand for flat products, were responsible for the decline in profit."