Tata Steel India on Wednesday reported a net profit of Rs.5,047 crore on a standalone basis for 2009-10, which was 3 per cent lower than the previous year's figure of Rs.5,202 crore on a higher total income of Rs.25,022 crore (Rs.24, 316 crore). The company registered a 4 per cent growth in operating profit at Rs.9,806 crore (Rs.9,442 crore) primarily due to an 18 per cent increase in deliveries and to performance improvement measures.
The company ended the year in robust shape with new records in almost all its operations.
It recorded the best ever production of hot metal (7.23 million tonnes), crude steel (6.56 million tonnes) and salable steel (6.44 million tonnes). The new ‘H' blast furnace produced 3.07 million tonnes of steel, which was 22 per cent higher than rated capacity. Overall sales grew 18 per cent to 6.17 million tonnes.
On a consolidated basis, Tata Steel announced a loss of Rs.2,009.22 crore for 2009-10 against a profit of Rs.4,951 crores in the previous year. The consolidated turnover for the group at Rs.102,393 crore in 2009-10 was 31 per cent lower than the previous year's figure of Rs.147,329 crore because of reduced capacity utilisation in Europe due to impact of the financial crisis in the first half compared to record high volume sale prices in the first half of 2008-09.
The board has proposed a dividend of Rs. 8 per share. The consolidated operating profit of Rs.9,340 crore halved from the previous year's figure of Rs.18,497 crore because of lower capacity utilisation in the fist half, primarily at Tata Steel Europe and lower average selling prices compared with the all-time high price levels before the onset of the financial crisis in September 2008.
Steel deliveries for the group at 24.3 million tonnes were 15 per cent lower.
The net finance charges at Rs.3,022 crore (Rs.3,290 crore) were 8 per cent lower primarily due to lower interest charges on variable elements of senior debt facilities and repayment of debt at Tata Steel Europe. The consolidated gross profit (profit before tax) for the year was at Rs.31 crore (Rs.6,743 crore).
Production up 37 %
Tata Steel Managing Director Hemand Nerurkar said, “the contribution of the Asian operations to the group's crude steel production rose to 37 per cent last year, compared to 30 per cent in the previous year. The strong and stable growth trajectory for the Indian economy is forecast to continue, which bodes well for Indian steel demand, through there are inflationary pressures arising on the supply side. It would be helpful to have access to new domestic raw materials sources in order to combat this danger. Meanwhile, we are accelerating our efforts to increase self-sufficiency through projects overseas.''
The European operations of Tata Steel staged a dramatic turnaround particularly in the second half of the financial year when the operating profit rose to Rs.2,303 crore compared to a loss of Rs.3,655 crore in the first half of the year.
The improvement was achieved entirely through productivity and efficiency gains as average selling prices in the second half were slightly lower. A key factor was the $1.5 billion savings delivered during the year through cost-saving and restructuring.
According to Tata Steel Europe Managing Director and CEO Kirby Adams, “the decisive measures we have been taking to combat the 35 per cent slump in European steel demand last year have succeeded in dramatically improving the company's financial performance. This was done through growth in market share, a higher value-added mix and significant and lasting cost reductions and in the fourth quarter the first net profit after 18 months.''
