The News International Team
Tata Steel, one of the world’s largest steel producers, disappointed street by reporting a whopping 70.4 percent decline in consolidated net profit at Rs 337.3 crore for the April-June quarter, impacted by provision for impairment of non-current assets, higher tax expenses and interest cost. Profit in the year-ago period was Rs 1,139 crore.
Analysts had expected the Tata Group company to report net profit of Rs 906 crore on revenue of Rs 35,300 crore for the quarter, according to CNBC-TV18 poll estimates.
Consolidated total income from operations grew by 11 percent, higher-than-expected, to Rs 36,427 crore in the quarter ended June 2014 from Rs 32,805 crore in same quarter last year.
Tata Steel said it has reported an exceptional loss of Rs 262 crore during the quarter after provision for impairment of non-current assets at Rs 1,577 crore and profit from sale of non-core investments worth Rs 1,314.2 crore.
Operating profit rose by 15.9 percent on yearly basis to Rs 4,272 crore and margin expanded by 53 basis points to 11.73 percent, which were lower than analysts’ expectations of Rs 4,300 crore and 12.2 percent, respectively.
Total tax expenses during the quarter surged 3 times to Rs 1,080.4 crore from Rs 351.4 crore in same quarter last year and finance cost climbed 26.2 percent year-on-year to Rs 1,252.4 crore.
Total expenses of the company jumped by 10.4 percent to Rs 33,704.92 crore Y-o-Y due to higher depreciation, raw material, employee, power and freight costs.
Steel deliveries increased to 6.46 million tonnes (MT) in Q1FY15, up 6.25 percent compared to 6.08 MT in Q1FY14 (down compared to 7.62 MT on sequential basis), said the company.
The scrip of Tata Steel, which announced earnings after market hourse, fell 1.33 percent to Rs 534.70 on the BSE.