India's Tata Steel on Friday reported quarterly net profit nearly tripled, led mainly by a one-time gain from a stake sale, and voiced concern about weakening markets in Europe and North America.The company posted a consolidated net profit of 53.47 billion rupees ($1.2 billion) for the first quarter to the end of June on turnover which rose 21 percent to 328.3 billion rupees.
"We delivered an encouraging performance, even as the European steel market weakened, which affected our deliveries," said Tata Steel Europe chief executive and managing director Karl-Ulrich Kohler in a statement.The company's better-than-expected performance came on the back of an extraordinary gain of 28.79 billion rupees ($639 million) from two stake sales completed during the April-June quarter.Tata Steel had posted a profit of 18.25 billion rupees in the same period last year and analysts had expected the company to post the same profit, excluding the gains from the stake sales.
The results incorporated figures from the company's European unit, Corus, as well as from its operations in Thailand and Singapore,During the quarter, Tata Steel sold a 26.2 percent stake in Australian coal mining firm Riversdale to Rio Tinto.The company also sold a 51 percent stake in group firm Tata Refractories to Nippon Steel's associate, Krosaki Harima Corp.
Sales in Europe slipped 2.2 percent to 3.5 million tonnes, the firm said.
Tata Steel told analysts in a presentation that uncertainty about the global economy had risen following the US credit rating downgrade and mounting worries about European sovereign debt."The softening of the market has been compounded by the euro zone sovereign debt crisis and economic indicators point to a manufacturing slowdown in Europe and North America," the company said.Tata Steel, like other metal producers, has seen demand for its products weakening, mainly in the construction and automobile sectors, even as high prices of coal and iron ore have affected earnings.