Tata Steel Q4 net drops 14 per cent

Tata Steel''s results for the fourth quarter have come below expectations. Though the company managed to grow volumes, margins were impacted by higher input costs.

For the fourth quarter ended 31 Match 2006, stand-alone net profits of Tata Steel declined 13.81 per cent to Rs783.11 crore from Rs908.58 crore. Stand alone revenues for the quarter increased 7.68 per cent to Rs4,193.33 crore from Rs3,894.39 crore for the previous year quarter.

Operating profits for the quarter declined 9.85 per cent to Rs1,300.8 crore from Rs1,442.93 crore. Operating margins as a percentage of net sales declined nearly 600 basis points to 31.5 per cent from 37.34 per cent.

Bottom-line for the quarter was affected by higher input costs, which increased 21.83 per cent as compared to the pervious year quarter. Cost of power rose 27 per cent while freight and transportation charges increased only 8.1 per cent.

Staff costs increased 17.78 per cent while other expenses went up by 11.6 per cent. Depreciation costs increased 26.96 per cent.

Other income for the quarter more than doubled to Rs64.36 crore from Rs29.74 crore for the previous year quarter.

Consolidated net profits for the quarter dropped 11.65 per cent to Rs813.22 crore from Rs920.5 crore for the previous year quarter. Consolidated revenues for the quarter increased 20.32 per cent to Rs5,615.59 crore from Rs4,667.2 crore.

For the full year 2005-06, consolidated net profits of the company are at Rs3,734.62 crore - an increase of 3.65 per cent from the previous year figure of Rs3,603.26 crore. Consolidated revenues increased 26.64 per cent to Rs20,491.04 crore from Rs16,181.05 crore.

Tata Steel is planning to raise up to $1 billion from the international markets to finance its expansion plans. The company is expanding capacity at Jamshedpur besides setting up green field units in the states of Chattisgarh and Orissa.

Overseas plans of the company include a new plant in Bangladesh and expansion of facilities at its subsidiary NatSteel of Singapore. The company is reportedly the highest bidder for a large steel company in South Africa.