Firm prices help Tata Steel clock Rs 4k cr net in FY07

MUMBAI: Tata Steel lived up to its global leadership position in line with the overall bullish steel trend when it posted a record net profit of Rs 4,222.15 crore or slightly more than $1 billion for the full fiscal year in a period of high volumes and firm product prices.

India’s largest private steel company, which in January snapped up Anglo-Dutch Corus — five times its size — for $13.7 billion, reiterated its intention to focus on integrating Corus before looking at other acquisition targets.

Tata Steel’s fiscal fourth quarter net profit climbed 41% to Rs 1,103.50 crore, while revenue rose 21.4% to Rs 4,980.44 crore.

For the full fiscal year, net profit was Rs 4,222.15 crore compared with Rs 3,506.38 crore. Its revenue totalled Rs 17,552.02 crore, a jump of 15% from last year.

“It was an outstanding year for Tata Steel,” said MD B Muthuraman. “Apart from the excellent results, this was also the year we acquired Corus,” he added.

The acquisition catapults Tata Steel as the sixth largest steel company in the world with a major presence in markets across Europe and Asia and with a product portfolio that caters to industries such automotive, packaging and construction.

Although the acquisition at $13.7 billion was termed costly by the industry, it is expected that the current strong price trend for steel prices could prove that the move was correct.

According to Mr Muthuraman, the company will save up to $450m over the next three years through synergy from the acquisition.

The market gave a cautious response with Tata Steel’s stock ending the day up 1.5% at Rs 597.3 on BSE. The metal index was up 0.38%.

Giving the outlook for the industry, Mr Muthuraman said that world steel demand in 2007 might maintain its 2006 growth of 8%, with prices in the European market to increase by about 5%.

The company also announced the appointment of four Corus directors on the board of Tata Steel.

This includes Corus chairman Jim Leng as deputy chairman, and chief executive Philippe Varin, Jacques Schraven and Anthony Hayward as non executive directors.