Tata Steel on Wednesday reported a 37 per cent growth in its consolidated net profit for the second quarter of 2014-15 at Rs.1,254 crore. However, the company was benefited by the one-off gain of Rs.1,147 crore from sale of its land in Borivali, Mumbai. Consolidated total income for the period slid 2.4 per cent at Rs.35,777 crore largely due to lower realisations in its European operations..
The profit before exceptional items stood at Rs.1,302 crore (Rs.1,398 crore). Production of steel was almost unchanged at 6.5 million tonne (6.48 million tonne). Addressing a press conference, Koushik Chatterjee, Group Executive Director (Finance & Corporate) said the company was able to maintain profitability levels during the quarter “despite several challenges in the market and the environment.”
The company generated around Rs.4,400 crore of cash flows from operations that were “deployed primarily in the ongoing capital expenditure program helping us marginally decrease the net debt levels.” The consolidated net debt at around Rs.68,000 crore was down Rs.1,600 crore over the year-ago period due to a recent refinancing of $7 billion debt. The capital expenditure in the first half of the year was at Rs.4,500 crore.
In its Indian operations, Tata Steel’s net profit was up 59 per cent at Rs.2,476 crore on 9 per cent higher sales of Rs.10,701 crore. There was a planned shutdown of one of the vessels for long products for 36 days and operating profit was down marginally at Rs.3,196 crore (Rs.3,202 crore) owing to higher iron ore prices. Owing to the shortage of ore in the domestic market, T.V. Narendran, Managing Director, Tata Steel (India & SE Asia) said the company imported 2.2 million tonne in the financial year to date.
Mr. Narendran expected volumes to be ramped up in the next two quarters even as there were strong headwinds due to regulatory uncertainty regarding mining and cheap imports.
Tata Steel Europe reported a profit before tax of Rs.113 crore against a loss of Rs.152 crore in the year-ago period.
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