Tata Steel, the world's sixth-largest steel maker, has posted a 56.37 per cent drop in third quarter net profit to Rs 466.24 crore from its Indian operation as slowing economic growth and the credit crunch prompted makers of cars and appliances to slash orders. The company reported a drop for the first time in almost three years due to 13.81 per cent fall in the volume of steel sold.
Total income has fallen 3.45 per cent to Rs 4,802.14 crore. For countering the slowing demand, the company has reduced its steel production by 0.89 per cent to 1,234,764 tonnes in the third quarter. The company's export turnover has reduced by 32.17 per cent to Rs 404.30 crore, compared to the corresponding quarter last year.
Following the depreciation of rupee, the company has registered a foreign exchange loss of Rs 126.80 crore. The company has inventory worth Rs 636.02 crore in its account. The raw material cost has increased 78.56 per cent in the third quarter to Rs 1,611.17 crore. Accordingly, the total expenditure has risen 13.45 per cent to Rs 3,575.50.
Tata Steel mines its own iron ore and buys a third of its coking coal needs. Long-term coking coal prices surged to $300 a tonne, while iron-ore prices almost doubled in the year. Tata Steel's subsidiary Corus imports its entire coking coal and iron-ore requirement.
Steel Authority of India on Tuesday said profit more than halved, while Tata Steel (Thailand), a unit of Indian steel maker, reported the biggest quarterly loss in at least six years in the three months ended December 2008.
For the nine-month ended December 2008, Tata Steel posted a 7.49 per cent growth in net profit to Rs 3,742.45 crore. Total income rose 27.65 per cent to Rs 17,815.22 crore during the quarter under review.
Tata Steel share price has risen 2.64 per cent to Rs 176.85 on Wednesday.
