Business Daily from THE HINDU group of publications
Wednesday, Jan 31, 2007
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Business Daily from THE HINDU group of publications Wednesday, Jan 31, 2007 ePaper |
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Financial Performance Corporate Results - Steel
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Boosting confidence Company's steel production rose to 1.28 million tonnes from 1.16 million tonnes. Its export turnover during the quarter was Rs 474.60 crore.
Higher production and increased sales to car manufacturers helped Tata Steel post a 41 per cent increase in its net profit for the third quarter of the current fiscal at Rs 1,063.75 crore compared with Rs 753.74 crore in the corresponding period of the previous fiscal. The company's net income during the quarter rose to Rs 4,469.98 crore from Rs 3,698 crore. Tata Steel announced its third quarter results after its board meeting on Tuesday morning, hours before its scheduled bidding face-off with CSN of Brazil for acquisition of Anglo-Dutch steel maker Corus.
Corus Bidding
The higher net profit notched up by the company during the quarter, backed by its positive outlook on the steel market in the coming months, will boost its confidence when it meets CSN for the bidding shoot-out, analysts say. Tatas would have to shell out at least $10.2 billion for buying Corus, with the price expected to go up higher as the bidding starts. The Tatas had first made a bid for 455 pence a share for Corus last year, which was revised to 500 pence a share on December 10, 2006. This was, however, trumped by CSN with a 515 pence bid. Indications are that the final price for Corus may even touch 600 pence a share. For 455 pence a share, Tata Steel would have had to shell out Rs 37,286 crore to acquire the entire share capital of Corus. It was then proposed to be financed through equity contribution by Tata Steel of $3.5 billion (Rs 15,862 crore) and the balance through non-recourse debt on Tata Steel UK to be serviced by cash flows from Corus. Now, with CSN's entry into the fray, financial strategies are being re-worked.
Steel Sales
The company's steel production rose to 1.28 million tonnes during the quarter from 1.16 million tonnes in the year-ago period, while its steel sales crossed the 1.23 million tonne mark. Its export turnover during the quarter was Rs 474.60 crore.
Related Stories: More Stories on : Financial Performance | Steel | Tata Steel Ltd
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