Tata Steel net up on high prices

Fourth quarter profit jumps 72% to Rs 4,177 crore

On the back of higher steel prices, Tata Steel on Wednesday reported a consolidated net profit of Rs 4,177.1 crore for the fourth quarter ended March, up 71.6 per cent compared to the same period last year. The turnover of the company in the quarter grew to Rs 33,818 crore as against Rs 27,501 crore.

The steel deliveries in the quarter were at 6.54 million tonne (mt) as against 6.30 mt last year.

The deliveries for the whole year were flat at 23.54 mt as against 23.61 mt. Its net profit for the year was Rs 8,983 crore as against a loss of Rs 2,009 crore last year. The turnover was Rs 118,000 crore from Rs 102,000 crore a year ago.

Hemant Nerurkar, managing director said there is robust demand in the emerging markets and slow recovery in the developed markets. "The Indian operations registered a 36 per cent increase in annual profits because of the favourable market conditions and the untiring efforts of employees to exceed targets," he said.

He said the Southeast Asian market hasn't performed well. "In the first half of the year, the Thailand subsidiary had issues with its blast furnace. Now its doing good. Also, demand in Singapore is good," he said. The turnover for the Indian operations for the year was Rs 29, 391 crore compared to Rs 25,018 crore a year ago. Ebitda (earning before interests, taxes, depreciation and amortisation) for the year was Rs 12,225 crore as against Rs 9,803 crore earlier. Profit after tax was reported at Rs 6,865 crore as against Rs 5,046 crore.

Tata Steel Europe posted an Ebitda of Rs 4,204 crore for 2010-11 against a loss of Rs 1,350 crore last year. Its profit after tax also reached Rs 1,667 crore as against a net loss of Rs 7,502 crore. The robust performance of Tata Steel Europe, includes the sale of TCP to SSI, Thailand, at Rs 2091 crore.

Karl-Ulrich Kohler, managing director and CEO, Tata Steel Europe said, "The fourth quarter has been good and we have made deliveries to the tune of 4.1 mt and the inventories are down to record levels."

He said the company is repositioning its business and the thrust will be on value addition and not volumes. The company recently announced job cuts to the tune of 1,500 employees to restructure its long steel business portfolio. He said that Tata Steel Europe is running at a capacity utilisation of 89 per cent as on March.

Koushik Chatterjee, CFO, Tata Steel said, "The gross debt on Tata Steel's books as on March 31 was $13.6 billion as against $12 billion a year ago." He said the company raised $8.8 billion of debt during the course of the year and paid $7.6 billion debt. The cash and cash equivalents at Tata Steel, as on March, was $3 billion, he said.