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Tata Steel Declares Q2, First-Half Results
11/15/2010 - During the first half of the financial year 2010-11 (H1 FY’11) ending September 30, 2010, Tata Steel Group recorded profit after tax of Rs 3,804 crores (US$847 million) compared to a loss of Rs 4,916 crores (US$1.09 billion) in H1 FY’10. The Group’s profit after tax for Q2 FY’11 of Rs 1,979 crores (US$440 million) was around 8.5% higher than the profit of Rs 1,825 crores (US$406 million) in Q1 FY’11.
During the first half of the financial year 2010-11 (H1 FY’11) ending September 30, 2010, Tata Steel Group recorded profit after tax of Rs 3,804 crores (US$847 million) compared to a loss of Rs 4,916 crores (US$1.09 billion) in H1 FY’10, an improvement of Rs 8,720 crores (US$1.94 billion). The Group’s profit after tax for Q2 FY’11 of Rs 1,979 crores (US$440 million) was around 8.5% higher than the profit of Rs 1,825 crores (US$406 million) in Q1 FY’11.
Group EBITDA in H1 FY’11 was Rs 9,024 crores (US$2 billion) compared to Rs 606 crores (US$135 million) in H1 FY’10. Group EBITDA in Q2 FY’11 at Rs 4,497 crores (US$1 billion) matched the level recorded in Q1 FY’11, despite steel prices falling in India and higher raw materials prices affecting the financial performance of both the Indian and European operations.
Group consolidated turnover at Rs 28,646 crores (US$6.4 billion) in Q2 FY’11 increased by Rs 1,453 crores (US$323 million), or 5%, compared with Q1 FY’11 on increased deliveries in India and price improvements in other geographies.
The Group’s steel deliveries fell 1% to 5.82 million tonnes in Q2 FY’11 from Q1 FY’11. Lower deliveries at the European operations during the summer months were largely made up by higher deliveries from Tata Steel India and Tata Steel Thailand.
Net finance charges for the Group at Rs 664 crores (US$148 million) during the September quarter increased by US$15 million over Q1 FY’11 on account of lower interest income earned.
The Group continued to enjoy a strong liquidity position of Rs 7,841 crores (US$1.74 billion) at the end of September 2010, resulting from tight working capital management across all geographies. Its net debt at the end of September 2010 stood at Rs 48,096 crores (US$10.7 billion).
Executive Comments – Tata Steel Managing Director, HM Nerurkar, said: “We registered strong sales in India in the second quarter, aided by growing strength in industrial activity and intensifying demand from the infrastructure, construction, and auto sectors. While we are confident of a fairly strong performance this financial year, we are focusing on the introduction of higher value-added products to our existing product range in order to ensure we retain market leadership in future. Meanwhile, the 3-million-tonne brownfield expansion at Jamshedpur is progressing as planned.”
Tata Steel Europe MD & CEO, Dr. Karl-Ulrich Köhler, said: “The profitability of this first half, in Europe, is a tribute to the cost and restructuring measures implemented in response to the financial crisis and our discipline in securing these benefits as demand returns to the market. In September our lenders showed their confidence in the Group’s future prospects by agreeing to a refinancing package to stabilize our debt arrangements. We now have a sound platform on which to strengthen our recovery and to develop our product and service differentiation initiatives. But, with an uncertain demand outlook in Europe, our operations also remain focused on cost control and stable manufacturing.”
Corporate Developments – Tata Steel approved participation in the Direct Shipping Ore (DSO) Project of New Millennium Capital Corp (NML) in September 2010. A Joint Venture Company (JVC), named Tata Steel Minerals Canada Ltd, was incorporated in October 2010. The JVC will acquire all the mining claims and assets relating to the DSO Project, carry out detailed engineering and facility construction, and be responsible for the project’s operations. Tata Steel will own 80% of the JVC and NML the remaining 20%.
On September 13, Tata Steel, through its wholly owned subsidiary Tata Steel Global Minerals Holdings Pte Limited, signed a joint expression of interest with the Government of Laos for the identification and evaluation of iron ore and coal mines in Laos.
Tata Steel, through Tata Steel Global Minerals Holdings Pte Limited, increased its stake in Riversdale Mining Limited, the listed entity in Australia, from 21.1% to 24.4% by way of open market purchases.
