TATA steel profit rises by 72 percent


Mumbai: Tata Steel reported a 72 percent rise in quarterly consolidated net profit from a year earlier due to higher product prices and robust sales growth at its India business, as well as a one-time gain of $561 million on the sale of a plant in Teesside, U.K., reports Prasenjit Bhattacharya and Anirban Chowdhury, WSJ. The world's seventh-largest steelmaker by volume said profit for the fourth quarter ended March 31 rose to $937 million, up from $546 million. Consolidated sales rose 23 percent to $7.59 billion from $6.17 billion in the fourth quarter, but the earnings margin before interest, taxes, depreciation and amortization shrank to 13.9 percent from 19.4 percent. The consolidated results included earnings of the company's operations in Europe, India, Thailand and Singapore. Tata Steel's local operations shook off the effects of a sharp rise in raw material costs to post higher earnings on the back of higher demand from India's construction and automobile sectors. European operations also showed improved performance, although the Ebitda margin of these operations, at 7 percent, lagged those of the Indian operations at 37 percent. "Higher selling prices and deliveries gave us a particularly strong end to the quarter, with additional one-off financial benefits from items such as the completion of the Teesside Cast Products sale," said Tata Steel Europe Chief Executive Karl-Ulrich Kohler. The European operations sold 4.13 million tons of steel products in the fourth quarter, with sales at $4.92 billion. The Indian operations posted sales of $1.87 billion, with the sales volume at 1.7 million tons. The chief financial officer Koushik Chatterjee said, the company's operations, especially those in Europe, will continue to face cost pressures from escalating raw materials prices. In regard with the expansion plan, Mr. Chatterjee said construction work on the company's $7.8 billion steel plant in the eastern Indian state of Orissa has begun. The plant, when fully operational, will have a total production capacity of 6 million tons a year, while the first phase will have a production capacity of 3 million tons a year.