Total income increased 7% to Rs 3,685 cr
Jamshedpur, Nov 13: Tata Steel , the world’s sixth largest steel maker, beat Dalal Street expectations on every parameter with reporting second quarter (July-September) consolidated net profit at Rs 917 crore as against loss of Rs 364 crore in a year ago period, driven by steady ramp-up of Indian operations and improved performance of European and South East Asian operations and tax write back.
Consolidated net sales grew 7.4 percent year-on-year to Rs 36,369 crore in three-month period ended September 2013.
According to a CNBC-TV18 poll, analysts had expected the steel maker to report net profit of Rs 339 crore on revenues of Rs 34,904 crore for the quarter.
“Indian operations continued the steady ramp-up of its expanded capacity despite the seasonally weak quarter, exacerbated by heavy monsoons and weaker economic conditions while operating performance in Europe continued to improve,” the company said in its release. During the same period, Tata Steel group’s steel deliveries increased 6.75 percent to 6.48 million tonne compared to 6.07 million tonne.
Steel deliveries through Indian operations increased 18 percent Y-o-Y (up 2 percent Q-o-Q) to 2.04 million tonne while in Europe, that grew 1 percent (up 10 percent sequentially) to 3.46 million tonne in the quarter gone by. Karl-Ulrich Köhler, MD & CEO of Tata Steel in Europe said, “The improvement in production continued into the second quarter as operations stabilised following the restart of the Port Talbot blast furnace.”
South East Asia’s deliveries rose to 0.96 million tonne from 0.77 million tonne year-on-year. “The South East Asian operations were partly affected by a furnace shutdown in Singapore, which came back into operation from August.
Volumes improved significantly at both NatSteel and the Thai operations,” Tata Steel said in its release. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 67.7 percent on a yearly basis to Rs 3,430 crore and operating profit margin expanded 340 basis points to 9.4 percent during September quarter.
Tax expenses declined to Rs 447 crore from Rs 660.75 crore due to deferred tax write-back of Rs 390 crore as against outgo of Rs 339 crore year-on-year.
During the same period, revenue from its steel business jumped 9.6 percent to Rs 35,114 crore with the EBIT rising 84 percent to Rs 2,762 crore. Standalone net profit of Tata Steel rose 15.4 percent to Rs 1,558.7 crore and net sales grew 8.8 percent to Rs 9,826 crore Y-o-Y. “Capital expenditure on the greenfield capacity in Odisha remains the key priority for the Group’s capital deployment and we have spent around Rs 4,500 crore in the first half on this project.
We continue to maintain adequate liquidity levels backed by project financing for the planned capex and track the currency movements to calibrate our hedging policy accordingly,” Koushik Chatterjee, group executive director (finance and corporate) said.
Cash and cash equivalent stood at Rs 12,779 crore and net debt at Rs 64,334 crore as of September 2013. Tata Steel’s stock was closed at Rs 358.85, up 1.86 percent on the BSE.