Calcutta, May 14: Tata Steel has posted a bigger-than-expected profit for the fourth quarter on the back of an all-round improvement in performance across geographies, including Europe, the biggest market for the company.
Consolidated profits for the quarter ended March 31, 2014 rose to Rs 1,036 crore from Rs 503 crore in the quarter ended December 2013. The company had suffered a consolidated loss of Rs 6,528.51 crore in the year-ago period.
For the full year, the underlying net profit was Rs 3,623 crore compared with Rs 332 crore for 2012-13. Tata Steel had taken impairment charges of Rs 7,390 crore during that period.
The board of directors of the company, which met in Mumbai today to finalise the results, has recommended a dividend of Rs 10 per share.
Even though the results came after market-hours, the Tata Steel stock soared during the day in anticipation of a strong result. It hit a 22-month high of Rs 454.45 before closing the day at Rs 452.15 per share, up 5.91 per cent with a large volume.
Group steel deliveries in the last fiscal increased to 26.56 million tonnes from 24.13 mt the year before. Deliveries in the last quarter went up to 7.62 million tonnes compared with 6.38 million tonnes in the same period last year.
T.V. Narendran, managing director of Tata Steel (India and South East Asia), said: “We have performed better than industry growth figures across product market segments with substantive increase in sales volumes. Sale of high-end products to the automotive segment has been the highest ever despite a de-growth in the auto market in India.”
Giving an update of the financial performance of the company, Koushik Chatterjee, group executive director (finance and corporate), said both the European and Indian operations displayed sustainable improvement.
“We spent around Rs 16,400 crore on capex during the year, with a large portion deployed at our greenfield plant in Odisha. Despite this significant spend, we were able to keep the net debt level stable over the last quarter,” he said.
Karl-Ulrich Köhler, MD and CEO of Tata Steel in Europe, formerly Corus, predicted a recovery in steel demand.
“Europe appears to be entering a phase of solid economic growth, which is supporting a recovery in steel demand. But EU steel use will remain at low levels historically against a background of continuing global overcapacity,” he said.