Tata Steel Ltd today reported a 22 per cent rise in consolidated net profit for September quarter as gains from selling shares in group companies negated decline in sales from weakening prices.
Net profit in July-September rose to Rs 1,528.71 crore from Rs 1,254.33 crore in the same period a year ago, the company said in a stock exchange filing.
Sales fell 18 per cent to Rs 29,304.69 crore in the July-September quarter this fiscal from Rs 35,777.11 crore in the same quarter of 2014-15.
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The company reported a sharp rise in other income mainly from sale of shares in Tata Motors and Titan for about Rs 3,200 crore.
"Monetisation of balance stake in Titan Ltd for Rs 703 crore" and "part-monetisation of stake in Tata Motors for Rs 2,398 crore," the company said in an investor presentation.
While, the company's Indian operations reported strong growth in production and deliveries in the September quarter, its European operations, particularly in the UK, significantly worsened as Britain continues to witness surge in imports and decline in competitiveness.
Tata Steel's UK unit took a "significant impairment charge" for its Strips operation and is continuing to assess options for its long-products business, the statement said.
Impairment of Strips Products, the UK cost Rs 7,319 crore and another Rs 276 crore was on account of long products.
The impairment and other charges totaled up to Rs 10,269 crore, most of which were balanced out because of net one-time credit of Rs 8,570 crore on restructuring of British Steel Pension Scheme (BSPS) scheme and Rs 1,113 crore net one-time credit on reclassification of main pension scheme in the Netherlands.
Tata Steel India and South East Asia Managing Director T V Narendran said: "Despite ongoing downturn in global commodity prices and seasonal weakness in demand, we were able to increase our deliveries by 9 per cent during the quarter on the back of strong sales to the auto sector and a higher proportion of value added products."
The underlying EBIDTA for the second quarter of 2015-16 increased by 14 per cent to Rs 1,963 crore. Reported EBITDA for the quarter rose to Rs 4,771 crore, including a gain of Rs 2,808 crore on the sale of quoted investments, the firm said in a statement.
Tata Steel Europe MD & CEO Karl-Ulrich Kohler said: "Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness."
Shares of Tata Steel today fell by 4.33 per cent to settle at Rs 225.60 apiece at the BSE ahead of the results which were announced after market close.
