Aug. 14 (Bloomberg) -- Tata Steel Ltd. extended yesterday’s decline in Mumbai after reporting a worse-than-estimated 70 percent plunge in first-quarter profit.
The shares of India’s biggest steelmaker fell as much as 1.8 percent to 525.10 rupees and traded at 532 rupees as of 11:06 a.m. in Mumbai. The stock was the second-biggest loser on the S&P BSE Metal Index and is set to close at its lowest level in a month. The key S&P BSE Sensex rose 0.2 percent.
Tata Steel’s net income in the quarter fell after the Mumbai-based company wrote down the value of its stake in a coking coal project in Mozambique and paid higher taxes. That followed a July 30 decision by Rio Tinto Group, the majority owner of the asset, to sell its entire stake to International Coal Ventures Pvt. Ltd., a group of Indian state-run metal and mining companies.
Group net income, including that of unit Tata Steel Europe Ltd., fell to 3.37 billion rupees ($55 million) in the three months ended June 30 from 11.4 billion rupees a year ago. That compared with the 9.4 billion-rupee average of 24 analyst estimates compiled by Bloomberg. Sales rose 11 percent to 361.4 billion rupees.
Tata Steel, part of India’s biggest business group, posted a one-time loss of 2.62 billion rupees in the quarter, compared with a gain of 177.6 million rupees a year earlier. The loss was mainly on account of a 15.77 billion rupee impairment charge taken to write down the value of its 35 percent stake in the Benga mine. The company also reported a one-time gain of 13.1 billion rupees, including 7.9 billion rupees from selling its stake in Dhamra Port Co.
Tax expenditure more than tripled to 10.8 billion rupees. The company had reported a one-time deferred tax gain of 4.15 billion rupees in the year-earlier period. Total expenses rose 11 percent to 337.05 billion rupees.
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