Tata Steel posts Rs 1,825cr profit in Q1

The group8217;s consolidated turnover rose to Rs 27,195 crore in the reporting quarter from Rs 23,292 crore,up 17 per cent,reflecting the recovery in global steel markets,Tata Steel Managing Director HM Nerurkar told reporters here.

On a standalone basis,Tata Steel registered a profit of Rs 1,579.39 crore for the June quarter against Rs 789.83 crore in the same quarter of FY10 as the auto,construction and infrastructure sectors grew at a faster pace in the country.

The Group8217;s steel deliveries rose 13 per cent to 6.05 million tonne compared to Q1 FY8217;10 as capacity utilisation improved in Europe. But Tata Steel Europe MD and CEO Kirby Adams said the European recovery is still slow as Southern Europe is badly lagging the northern economies.

8220;Steel demand and prices have both recovered strongly in the last two quarters. While the recent surge in imports affected our sales to some extent,the year should see a strong performance from our Indian operations,backed by full availability of the 6.8 million tonne per annum capacity,several improvement programmes in place and strong growth in demand,8221; Nerurkar said.

Tata Steel India8217;s turnover rose by 17 per cent at Rs 6,551 crores in Q1 FY8217;11 compared to Q1 FY8217;10 and fell 11 per cent compared to Q4 FY8217;10.

Turnover at Tata Steel Europe rose by 16 per cent at Rs 17,711 crore in Q1 FY8217;11 compared to Q1 FY8217;10 and by 4 per cent compared to Q4 FY8217;10.

In the April-June period,the recovery of the European operations continued. Not only was there a USD 692 million turnaround in Corus8217; year-on-year EBITDA performance,there were also significant improvements in revenue and capacity utilisation.

This was the result of higher selling prices and the fact that the full impact of recent raw materials price rises on profitability had yet to be felt,Adams said.

European demand has improved in sectors like automotive and aerospace. However,the long-term sustainability of the recovery is highly dependent on future growth in the European construction sector,Adams added.

The company8217;s 3-mtpa expansion plan at Jamshedpur is on schedule and is expected to be ready by next year,Nerurkar said.

Meanwhile,Tata Steel raised USD 350 million in debt for working capital amid rising raw material costs,Chief Financial Officer Koushik Chatterjee said. The company has also secured commitment for subscriptions to privately placed redeemable non-convertible debentures totalling Rs 3,000 crore USD 646 million,with a final maturity of 20 years from the date of allotment. The proceeds will be used to meet expansion projects in the country and will be drawn down by the end of FY8217;11,Chatterjee said.