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PSM budget estimates project Rs 7,662 million loss




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    The management of ailing Pakistan Steel Mills, in its budget estimates for the financial year 2012-13, has projected a net loss of Rs 7,662 million and requested the Board of Directors that the same be approved. Further it has recommended that normal capital expenditure for procurement of machinery etc; amounting to Rs 806 million during 2012-13 on case to case basis, and cash flow needs to be managed by own efforts in sale of coke breeze and yards, and efficient use and timing of cash flows be also considered and approved. 

    Highly placed sources told Business Recorder here on Tuesday the Audit Committee of Pakistan Steel Mills (PSM) has cleared the operational and capital expenditure/major overhaul and essential repair budget for the financial year 2012-13 and submitted to the Board of Directors for approval. The net loss after tax of PSM in the financial year 2011-12 had stood at Rs 21,399 million. 

    On submission of PSM, five-year business plan, the management expects that the Government of Pakistan will approve an amount of Rs 13.6 billion as a fresh loan/financial support through National Bank of Pakistan and one billion rupees as interest free loan. 

    The management in budget 2012-13 estimated the production target at 63 percent average annual capacity utilisation during the year, while the sales targets have been projected at Rs 51,318 million (net) with increased 10 percent prices against last year. The procurement of all raw materials at 63 percent capacity utilisation is estimated at Rs 36,737 million excluding GST with increased prices of coal five percent and iron ore seven percent. 

    Other income for the year 2012-13 is estimated at Rs 1,783 million (ie 2.5 percent of net sales + Rs 500 million waste material yard sales). The personnel related cost has been estimated at Rs 11,273 million with increased 10 percent against last year and the exchange rate is forecast at one US$= Rs 95 PKR for 2012-13. 

    Since, the profitability in flat products is higher than long products, the product mix has been revised to produce and sell more flat products. Further non-operational expenditures have been minimised and assumed that higher quantities of iron ore (lump) will be produced locally including increased quantity from PSM own captive mines. 

    Copyright Business Recorder, 2012

     

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