SAIL registered operating profits of Rs 2,497 crore compared to Rs 2,458 crore in the previous year. Dismal scenario notwithstanding, the board of directors has recommended a dividend of 31 per cent, which works out to be Rs 41.30 crore. The company has made a tax provision of Rs 16 crore.

In a year which saw slackening demand for steel, the company made a sales turnover of Rs 14,624 crore, up by 3.6 per cent from the previous year and registered a 7 per cent growth in its sales volume.

SAIL had paid Rs 1,554 crore as interest compared to Rs 1,179 crore in the previous year. A similarescalation was seen in the depreciation cost also. depreciation stood at Rs 795 crore as against Rs 691 crore in 1996-97.

The net sales realisation, however, improved by only 2.5 per cent during the year, owing to sluggish demand. Describing the last year as a difficult one for the steel industry, SAIL chairman Arvind Pande said apart from input cost increase, sail has had to bear the burden of high interest and depreciation cost." This year also, he said that sail will have to bear additional costs on account of capitalisation of its other units which were undergoing modernisation, expected increase in wages and higher input costs.

SAIL's emphasis on cost reduction resulted in savings of over rs 700 crore enabling the company to substantially offset the rs 800 crore increase in input costs in 1997-98 alone. Meanwhile, sources said SAIL had signed a memorandum of understanding with the government which commits a net profit of Rs 300 crore in 1998-99 provided steel prices rise between six to seven percent during the year.