The company attributed the primary reason for the huge loss figure to a steady decline in realisations. Sales for the period dipped to Rs 2,262.91 crore as compared with Rs 2,519.47 crore in 1997-98.

The company said that realisation drop coupled with change in the product and market mix had an adverse impact on the total sales turnover to the tune of Rs 260 crore. At the same time, there was also a significant rise in input costs.

Other income was substantially higher at Rs 189.21 crore against Rs 132.98 crore in the previous fiscal, while interest charges were down to Rs 502 crore from Rs 530.99 crore.

The company said production of hot-rolled coils at 1.58 million tonnes was three per cent higher than 1.53 million tonnes in 1997-98. Sales, on theother hand, was one per cent lower at 1.479 million tonnes.

Exports, though around 23 per cent higher at 4.41 lakh tonnes, would have had a negative impact on the bottomline as international prices were at least 20 per cent lower than domestic prices throughout the year.

The company has said that Essar Steel debt profile is not in consonance with international norms in terms of its maturity profile. Measures are being taken to increase the maturity profile which could go towards mitigating operating cash-flow mismatches.

It may be recalled that Steel Authority of India Ltd last week reported a whopping Rs 1,573-crore loss for fiscal 1998-99 against a net profit of Rs 132 crore in the previous year. Sales grew by a meagre 2.3 per cent to Rs 14,994 crore from Rs 14,624.07 crore in 1997-98. The board of directors took the financial results on record on Friday.

The net loss before tax stood at Rs 1,618.33 crore against a net profit of Rs 148.59 crore in 1997-98. The reserves (excluding revaluationreserve) of the company fell to Rs 2,858.14 crore from Rs 4,427.58 crore in the previous year. The operating profit for 1998-99 stood at Rs 1,503 crore.

According to a statement issued by SAIL, the loss is due to the depression in steel demand and higher burden of depreciation and interest on the commissioning of major modernisation schemes at Rourkela and Bokaro plant and other capital schemes (Rs 5,362 crore) during the year and merger of loss-making subsidiary Visvesvaraya Iron and Steel Ltd (VISL).

The loss was accentuated due to a downward stock valuation and product mix variance. SAIL had announced a cumulative loss of Rs 890 crore for April-December 1998.

During 1998-99 the company had to bear higher costs, including escalation in input costs of over Rs 450 crore and capital charges which comprised an increased interest and depreciation burden of Rs 3,122 crore. Depreciation for 1998-99 stood at Rs 1,104.06 crore, an increase of 39 per cent over Rs 794.66 crore in the previous year. Interestcharges at Rs 2,017.44 crore were up by 30 per cent from Rs 1,553.76 crore in the previous year.

SAIL chairman Arvind Pande said: "The results of the company are a culmination of the adverse impact of market factors, high fixed costs due to overmanning and the cost of modernisation of our plans".

Essar Shipping net up

MUMBAI: Essar Shipping has registered a net profit of Rs 48.03 crore in 1998-99, a 9 per cent increase over the previous year. According to a communique, this comes despite the decline of 3 per cent in total income, due to depressed market conditions. Total income stood at Rs 434.88 crore, while operating profit was Rs 249.16 crore.

The net profit growth excludes the profit of Rs 22.03 crore earned on the sale of ships. During the year under review, the company made a loss of Rs 2.27 crore from the sale of ships.

Essar Shipping reduced its operating expenses by 3 per cent to Rs 185.72 crore, while interest and finance charges have declined by 22 per cent to Rs 73.27 crore. About41 per cent of the company's income, Rs 175.16 crore, was earned in foreign exchange.