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Tata Steel net profit rises by 50 %

— PHOTO: SHASHI ASHIWAL

EFFICIENT MANAGEMENT: Koushik Chatterjee (right), Tata Steel group CFO, with H. M. Nerurkar, COO, Tata Steel, addressing a press conference in Mumbai on Friday.

MUMBAI: A higher proportion of value-added products and higher net realisation on blended value-added products has resulted in Tata Steel (excluding Tata Steel U.K. or Corus) report a smart improvement of 50 per cent in its net profit at Rs. 1,787.81 crore in the second quarter of 2008-09 against Rs. 1,190.83 crore. Sales were higher by 43 per cent at Rs. 6,744.16 crore against Rs. 4,724.85 crore.

Production for the quarter was up 4 per cent at 1.33 million tonnes and saw a 11.7 per cent jump on a sequential basis. However, sales were flat at 1.22 million tonnes but up sequentially by 5 per cent.

The company restructured its overseas holdings and transferred its stake in Tata Steel (Thailand) Public Company to Tata Steel Global Holdings. The profit of Rs. 136.33 crore from the transfer is included in other income of Rs. 238.37 crore (Rs. 80.50 crore). Exceptional items were a notional loss of Rs. 345.62 crore which pertains to an unrealised translation loss on convertible alternate reference securities (CARS) issued in September. CARS are convertible into equity shares only between September 2011 and August 2012 and are redeemable in foreign currency in September 2012, if not converted into equity and are neither convertible nor redeemable till September 2011.

For the half year ended September 2008, the net profit was up 36 per cent at Rs. 3,276.21 crore (Rs. 2,412.94 crore) on a 45 per cent higher sales of Rs. 12,834.25 crore (Rs. 8,856.63 crore). The results of Tata Steel U.K. (Corus) will be announced in November and according to Koushik Chatterjee, Chief Financial Officer, Tata Steel, “around 300 million pound sterling amounting to 10 per cent of the term loans on Tata Steel U.K. have been pre-paid from excess cash so that till the December 2009 quarter, there is no principal repayment obligation for Tata Steel. Pension Fund had a surplus of 690 million pound sterling at the end of June 2008 and till September 2009 this has gone up to 790 million pound sterling.”

Hemant Nerurkar, Chief Operating Officer, said it was not looking at a cut in domestic production. “In fact, in the second half of the year, production will go up to 6.8 million tonne expansion having come on stream from October as part of the plan to take capacity to 10 million tonnes annually. This will be followed by the greenfield project in Orissa.”

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