The Hindu : Tisco's net profit zooms

Online edition of India's National Newspaper
Friday, May 30, 2003

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Business

Tisco's net profit zooms

By Our Special Correspondent

<167,4.3p,1>MUMBAI, MAY 29. Tata Iron and Steel Company has reported a sharp rise in its net profit at Rs. 1,012.31 crores for the year ended March 31, 2003 against Rs. 204.90 crores in the previous year. The company has doubled the dividend to 80 per cent for 2002-03.

On a consolidated basis, the group has posted a net profit of Rs. 1,021.77 crores during the year against Rs. 193.57 crores. Total inome has spurted to Rs. 9,183.74 crores from Rs. 7,511.36 crores.

"It was not unexpected for Tata Steel management and it is below our expectations," said B. Muthuraman, Managing Director, Tata Steel, while addressing a press conference here today to announce the company's results. On volatility in steel products prices, Mr. Muthuraman said "The power of product mix and the power of market mix exceeds the power of price".

Production during the year was higher at 39.75 lakh tonnes against 35.96 lakh tonnes in the previous year. Sales touched 39.05 lakh tonnes against 35.33 lakh tonnes. Net sales have risen to Rs. 8,721.32 crores from Rs. 6,697.49 crores. The operating profit has shot up to Rs. 2,301.98 crores from Rs. 1,271.18 crores. The profit, before tax and extraordinary items, was Rs. 1,492.07 crores against Rs. 462.31 crores. Exports have surged to Rs. 1,313.24 crores from Rs. 580.75 crores.

The company had incurred employee separation cost of Rs. 1,510.09 crores. This has been adjusted against the securities premium account and capital redemption reserve. The effect of the financial restructuring has been given in the last quarter of 2002-03. As a result, employees separation cost in the last quarter was lower by Rs. 56.70 crores as well as for the whole of 2002-03. During the quarter ended March 31, 2003, Tisco recorded a net profit of Rs. 469.08 cores (Rs. 122.47 crores). Total income in the quarter under review has increased to Rs. 2,677.74 crores from Rs. 1,942.36 crores.

Mr. Muthuraman said Tata Steel's efforts would be to come out of the commodity cycle which usually affects the steel companies' profits. Because of breaking out of the commodity cycle Tata Steel's operating profit grew despite prices remaining almost same. "One of the fundamental strengths of the company is that we have technology and are able to take advantage of a growing market," he said. According to him, steel prices will be less volatile in the current financial year. This year Mr. Muthuraman expects sales volume to be higher by three lakh tonnes. The company intends to concentrate on a richer product mix and higher sales of branded products. Further he expects the growth rate to be in the region of 5-6 per cent.

VSNL

<167,0p,1>Videsh Sanchar Nigam has posted a net profit of Rs. 191.10 crores in the quarter ended March 31, 2003 against Rs. 316.30 crores in the corresponding period in the previous year. Total income has dropped to Rs. 1038.30 crores from Rs. 1776.10 crores.

The company has posted a net profit of Rs. 780.10 crores in the year ended March 31, 2003 against Rs. 1407.4 crores in the same period last year. Total income has declined to Rs. 4,812.5 crores from Rs. 7,089 crores.

The board has recommended a final dividend of Rs. 8.50 per share for the year ended March 31, 2003.

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