HTML clipboardTata Steel Ltd , the world's No. 6 steel maker, on Thursday missed
forecasts with a 60 percent drop in consolidated net profit for the fiscal year
ended March and said 2,045 jobs in Europe units were at risk.
It said its Anglo-Dutch Corus Unit was starting consultations on job cuts due
to the continued deterioration in market conditions and falling demand.
"The recession in world demand looks deeper than what we thought six months
ago," Managing Director B.Muthuraman told a news conference.
Global steel production has tumbled this year, as demand in key steel
consuming sectors such as construction and automotive shrank, forcing
steelmakers such as Arcelor Mittal to sharply reduce capacity.
In April, the World Steel Association forecast steel demand would tumble 15
percent in 2009, its steepest fall since World War II.
Tata Steel reported a net profit after minority interest and share of
profit of associates of 49.5 billion rupees ($1.02 billion) in 2008/09, compared
to a consolidated net profit of 123.5 billion rupees reported a year ago.
Consolidated net sales for the year rose to 1.46 trillion rupees from 1.31
trillion rupees reported a year earlier.
That compared with a forecast for net profit of 84.23 billion rupees, on net
sales of 1.5 trillion in a Reuters poll of six brokerages.
Tata Steel did not release quarterly figures. A Reuters calculation showed it
suffered a consolidated loss of about 45.4 billion rupees in the January-March
quarter.
Nine month consolidated profit stood at 94.86 billion rupees, on net sales of
1.2 trillion.
CHARGES
Tata Steel it took a restructuring and impairment charge of $805
million in the year for its Europe operations.
It said profits would have been lower by 54.97 billion rupees had it charged
changes in its actuarial valuations on its European employee pension plan to the
profit and loss account instead of the reserves and surplus account.
Tata Steel, which last month won approval from banks to ease
conditions on 3.7 billion pounds of loan it took to buy Corus, said it had
strong liquidity and no material repayment obligations or refinancing for the
next 12 months.
It said it had cash and equivalents of $2.1 billion on June 20 and an undrawn
bank facility of $1.3 billion.
Shares in Tata Steel ended down 2.1 percent at 397.95 rupees, ahead of
the results, in a Mumbai market that fell 0.5 percent.
The shares are up 85 percent so far in 2009 after tumbling 77 percent in
2008.
($1=48.6 rupees)
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