Tata Steel has posted a profit after tax of Rs 1,003 crore for the third quarter ended December 31, 2010, compared with Rs 472.65 crore in the same period last year.
Consolidated net sales stood at Rs 28,606.15 crore, up 10 per cent over Rs 26,068.55 crore last year. The company’s Ebitda, however, declined by one per cent at Rs 3,374 crore, against Rs 3,401 crore in the year-ago period, owing to rising input costs and continued dismal performances of the Southeast Asian subsidiaries. Hemant Nerurkar, managing director, said, “The company managed to post a higher Ebitda in spite of upward pressure of raw material costs and a decline in apparent demand in Europe.”
Nerurkar said Tata Steel India was on track to achieving its volume target of 6.4 million tone for the financial year. “Steel demand in India is continuing to grow at a robust 10-12 per cent. Moreover, the auto sector is growing rapidly in India and the company is looking to sell more skin panels for the current year and further increase those sales next year. We are looking to sell at least one million tonne of steel as skin panels this year,” he said.
Talking about the performance of the company’s Southeast Asian subsidiaries, Nerurkar said, “Southeast Asian operations continue to be affected and both the companies (Nat Steel and Tata Steel Thailand) are now focussing on demand from neighbouring countries. They are increasing their production of value-added steel and are also banking on the infrastructure spend in those countries.” Ebitda for the Southeast Asian subsidiaries, dipped by to Rs 16 crore, compared with Rs 104 crore last year.
Ebitda for European operations was down 40 per cent for the third quarter at Rs 395 crore. Karl-Ulrich Kohler, managing director and CEO, Tata Steel Europe, said, “The cost of production in Europe has gone up by 8 per cent due to the raw material cost push, especially, iron ore and coking coal.” He said though steel prices in Europe are improving, the momentum must continue, since raw material cost push is acute. “It is only fair to say that in the short term, managing raw material is a challenge for all steel makers,” he said.
Koushik Chatterjee, group CFO, Tata Steel, said, “Robustness in India will continue on the back of auto demand, which is growing at 20 per cent. The construction and infrastructure sector has also picked up in December.” Talking about Europe, Chatterjee said, “The engineering and auto sector in Europe continues to grow. However, the construction sector continues to remain weak and will be negatively affected by the euro zone cuts and sovereign debt issues.”
