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Tata Steel reports 21.87% YoY rise in Q2FY16 consolidated net profit

Jamshedpur, Nov. 5: Tata Steel, the country’s multinational steel-making company, reported consolidated net profit of Rs. 1,528.71 crore for the quarter, registering growth of 21.87% YoY and clocked two folds jump on QoQ. Company’s revenue stood at Rs. 29,304.69 crore, registering decline of 18.09% YoY and 3.28% QoQ. The company reported other income worth Rs. 2,938.19 crore.

According to a press release issued by the steel giant on Thursday, the company’s core operating profit at Rs. 1,830.49 crore, witnessed fall of (49.75%) YoY and (34.01%) QoQ. Operating margin at 6.24% declined by 394 bps YoY and 291 bps QoQ.

For six months ended September 30, 2015, the company’s consolidated net profit at Rs. 2,291.67 crore, increased by 43.97% YoY. The company’s revenue stood at Rs. 59,605.02 crore, down by 17.44% YoY.

On standalone basis, the company’s net profit of Rs. 2,522.92 crore, registered growth of 1.87% YoY and reported two times spurt on QoQ. Revenue at Rs. 9,531.08 crore, recorded 11.62% YoY and 4.80% QoQ growths.

For six months ended September 30, 2015, the company’s standalone net profit at Rs. 3,771.53 crore, declined by 20.50% YoY. The company’s revenue stood at Rs. 18,624.79 crore, down by 12.36% YoY.

Mr. T. V. Narendran, Managing Director of Tata Steel, India and South East Asia, said, “Despite the ongoing downturn in global commodity prices and the seasonal weakness in demand, we were able to increase our deliveries by 9% during the quarter on the back of strong sales to the auto sector and a higher proportion of value added products.

We continue investing in delivering value to our customers and in our brands and distribution network across India. This coupled with better operational efficiencies has helped us partially counter the headwinds of increasing imports and lower steel prices. While we welcome the recent support extended by the government through increase in import levies, the deteriorating global demand-supply equation threatens to negate the benefits of the same.”
He added, “The South East Asian operations continue to be impacted by rising imports from China.

However, our renewed focus on cost savings and increasing downstream sales and exports has helped offset the declining realisations and generated a turnaround in performance. We are making good progress on our 3MTPA greenfield expansion Project at Kalinganagar.”

Meanwhile, Dr Karl-Ulrich Köhler, MD & CEO, Tata Steel, Europe, stated, “Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness.

We have made three restructuring announcements in the UK since July leading to reduced volume and costs. We are working with the UK government to urgently secure a more competitive trade and regulatory environment and we will support our employees affected by restructuring. We are also continuing to assess all the strategic options for our Long Products business.”

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