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Two-fold rise in Tata Steel Q2 consolidated net

(The Hindu Business Line)

Better price realisation, efficient cost control and management have led to more than two-fold increase in Tata Steel’s consolidated net profits for the quarter ended September 30, Mr B. Muthuraman, Managing Director, Tata Steel, said here on Tuesday.

Overall, we have done well, he said, while conceding that there were concerns in the near term, though not so much in India.

Mr Muthuraman said a series of initiatives had been taken to effect cost reduction and improve performance. Three furnaces at Jamshedpur were now producing what six were earlier. Against a targeted cost reduction of Rs 890 crore planned for the year, Rs 450 crore had been achieved so far and the target had been raised by Rs 350 crore and he hoped to make an additional Rs 300 crore on this front.

Admitting that prices in India and South Asia had come down by $350 a tonne, he said “we have to wait and see for the January quarter.”

There were some signs of the economy picking up. The Government measures to ease liquidity and announcement of infrastructure projects were a positive signal in terms of demand through Government spending, he said, while ruling out any production cut in India operations.

On the expansion programme, Mr Muthuraman said the Jamshedpur and Orissa projects would get priority, while the Jharkhand and Chhattisgarh projects could face delays.

Mr Philippe Varin, CEO, Corus, on conference call, said the UK operations operating profit was up 63 per cent at $1,417 million and of this $250 million was in business and $1 million at the corporate level. Bonuses of staff and management were off. Production was aligned with demand and a 30 per cent production cut was in force, besides which a there was “significant” reduction in the number of a 1000-odd temporary workers. The company was speaking with the Dutch Government on reducing the working hours of its operations there. Plans were in place to achieve cost savings of £350 million in the second half of the year.

Mr Kaushik Chatterjee, CFO, said UK pension fund’s (Corus’) surplus was in the range of $820 million in September and it had reduced its exposure to equity from 40 per cent to 25 per cent. There was no outstanding bridge loans or short term loans currently, and no concerns on liquidity as well.
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