Tata Steel arms cut parent?s Q3 net
The consolidated net profit of Tata Steel Ltd for the third quarter lags behind by around Rs 10 crore, reports Suman Layak.india Updated: Jan 31, 2007 00:12 IST
The consolidated net profit of Tata Steel Ltd for the quarter ended December 31, 2006 lags behind the standalone net profit of the company by around Rs 10 crore.
This indicates that the operations of the various arms and subsidiaries of the company have not been able to record a surplus in this quarter.
The arms and subsidiaries have a positive contribution the in the nine month period but have not performed in the last quarter.
The Board of directors of Tata Steel Ltd announced a 41 per cent increase in its net profit for the quarter ended December 31, 2006 just a few hours before it was scheduled to enter the auction process for UK-based steel maker Corus Group Plc.
The company recorded a quarter turnover of Rs 5038 crore, an increase of 20 per cent and the net profit stood at Rs 1064 crore. In the corresponding period of 2005 the company had recorded a net profit of Rs 753.74 crore and a turnover of Rs 4,185 crore.
The picture of robust health that this presents however is not the case when we take the consolidated figures of the company. The consolidated net profit is actually Rs 10 crore less for this quarter at Rs 1054 crore indicating that all the acquisitions made by the company in the recent years have not turned profitable yet.
For the nine months ended December, the company’s net profit is Rs 3118 crore while the consolidated net profit is Rs 3206 crore. This indicates that in the nine months period the subsidiaries and arms have returned a surplus and that the negative contribution has happened only in the third quarter – the October-December quarter.
Tata Steel’s major acquisition in recent years has been Singapore-based Nat Steel which has finishing mills in China and in south east Asian countries and Thailand based Millennium steel.
It also has a host of other investments and joint venture companies, some of which are in the very early part of their lifecycle.