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Published on October 17, 2007

The sharp drop was due mainly to a provision for the impairment of machinery at an oxygen plant, an asset write-off and higher production costs.

President Santi Charnkolrawee said in a statement to the Stock Exchange of Thailand yesterday that while the company's average cost of goods sold increased Bt1,900 per tonne, the average price rose only Bt1,100.

Tata Steel's net profit for its fiscal second quarter ended last month was down Bt259 million quarter on quarter, or 61 per cent. This was due partly to extraordinary losses in the second quarter and an extraordinary gain in the first quarter.

"The net profit for this quarter involved a Bt6-million loss for a building write-off and Bt48-million provision for machinery impairment in an oxygen plant of the company's NTS Steel Group subsidiary for the preparation of an area for a mini-blast-furnace project," Santi said in the statement.

The fiscal first quarter booked a Bt43-million gain from the sale of land by subsidiary Siam Iron and Steel (2001).

Excluding the non-recurring items, the fiscal second-quarter net profit declined Bt162 million quarter on quarter, or 42 per cent, due to costs increasing Bt1,000 per tonne.

In the second quarter, the company recorded net revenue of Bt6.65 billion - up 15 per cent on quarter - on sales of 340,000 tonnes. Prices of raw materials kept rising, and customers anticipated that the rebar price would keep rising, so they acquired more rebar.

The average selling price was Bt19,500, up Bt200 from the first quarter. Increases in raw-material prices and the steel-bar market price were the main reasons.

Compared with last year's fiscal second quarter, with net revenues of Bt5.01 billion on sales of 272,000 tonnes, revenue and volume grew 33 per cent and 25 per cent, respectively, due to lower supply coming from competitors.

As of the end of the fiscal second quarter, total assets were Bt21.46 billion, down Bt232 million quarter on quarter, or 1 per cent.

Inventory in the quarter dropped Bt286 million, while accounts receivable increased Bt213 million on higher sales.

Property, plant and equipment assets decreased Bt233 million in value on depreciation of Bt206 million and a decrease in fixed assets of Bt27 million, due to the write-off of Bt6 million by the oxygen plant owned by the NTS Steel Group.

The Nation