May 10, 2004
Tata Sponge Net Up by 87%
Tata Sponge Iron Limited has posted Profit Before Tax of Rs.53 crore for 2003-04, up 107% and Rs.34 crore net profit, up 87% compared with previous year. This excellent financial performance has been achieved due mainly to a buoyant steel market and a high demand for quality sponge iron despite an 8% drop in production. The lower production has been attributed to poor quality of non coking coals sourced from government owned collieries with higher shale and ash content. Earnings per share doubled from Rs.11.94 to Rs.22.31 prompting the Board to announce a 50% dividend as compared with 30% the previous year.
Encouraged by the good results, the company management is seriously considering a plan to more than triple its sponge iron manufacturing capacity as well as generate additional power from the heat of waste kiln gases and to subsequently forward integrate to steelmaking. The company is also planning to acquire an iron ore mine and a coal block to strengthen its raw materials base necessary for its expansion.