India's Tata Steel swings into full-year net profit

25th May 2011, Comments 0 comments

India's Tata Steel, the world's seventh largest steelmaker, on Wednesday swung into a full-year net profit from a loss a year earlier, as industrial demand improved and steel prices rose.

Tata Steel posted a consolidated net profit of 89.83 billion rupees ($2 billion) for the twelve months ended March, against a loss of 20.09 billion rupees a year earlier, a company statement said.

The earnings include a one-time gain of $561 million from the sale of its Teesside plant in England to Thailand's Sahaviriya Steel Industries in March.

Tata Steel shares fell 0.83 percent or 4.7 rupees to 561.5 at the Bombay Stock Exchange ahead of the results.

The company, part of the sprawling Tata Group conglomerate, became one of the world's biggest steelmakers after purchasing Anglo-Dutch company Corus for 13.7 billion dollars in 2007.

Tata Steel said earlier this month it is to axe up to 1,500 jobs at two sites in northeastern England, due to weak demand for its products in the region.

The company said it would close or mothball its Scunthorpe plant, risking the loss of 1,200 positions, and would cut another 300 posts in Teesside.

At the same time, Tata Steel has said it would invest £400 million ($649 million) in a five-year plan to try and turn around the long products business to target "high value" markets.

For the fourth quarter ended March, Tata Steel said its net profit rose 72 percent at $937 million, up from $546 million a year earlier, the company said.

"It was a good year as steel consumption in India rose, aided by strength in industrial activity," said Tata Steel managing director, H.M. Nerurkar.

"Higher selling prices and deliveries gave us a strong end to the March quarter, with one-off benefits from the completion of the Teesside sale," Tata Steel Europe chief executive Karl-Ulrich Köhler, said in the statement.

European operations of Tata Steel will continue to face cost pressures from escalating raw materials prices, such as iron ore and coking coal, officials told reporters in the city.

Europe-based Corus was rebranded to Tata Steel in September last year.

© 2011 AFP

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