STEEL group Corus last night reported half-year operating profits of £483m, but warned of tougher conditions ahead due to falling steel prices.

The rise, from £195m last year, has been attributed to the group's Restoring Success restructuring plan, which saw the Teesside Cast Products (TCP) business, which employs 1,700 people, separated from Corus.

This week, it announced the first phase of a £55.5m investment in Teesside Cast Products with a £12m boost to help make the business more competitive.

Earlier this year, TCP entered into an £87m agreement with a consortium of companies to supply slab steel. The agreement safeguards steel jobs on Teesside for the next ten years.

Corus, which employs about 3,000 people in the region, was formed in 2000 out of British Steel and Dutch company Hoogovens.

The company has been helped by rising steel prices, but said the present quarter had seen a reversal in that trend, while increases in the price of raw materials pushed up operating costs by 13 per cent to £4.85bn in the half year.

In the long products division, which includes TCP, Lackenby beam mill and the special profile division at Skinningrove, turnover rose from £1.2bn to £1.4bn.

John Bolton, managing director of TCP, said: "The result for Corus group in the first half are very good.

"While market improvements have contributed significantly, it is internal initiatives to improve costs which help Teesside to become more competitive.

"Added to the recent investment announcement, this is all good news for TCP."

Corus said it continued to look at initiatives to improve its performance, including expansion into low-cost and high-growth countries.

It said that one such area could be Turkey, as the country's largest steel producer was being privatised.

Other long-term initiatives recently saw Corus announce an investment of £130m at one of its biggest plants, in Scunthorpe, where it will make structural sections, rail and wire rods.

Anthony Platts, assistant director at Tees Valley investment manager Wise Speke, said: "The selling price of steel has cooled over the past year, putting pressure on margins.

"Despite this, the efficiency drives over the past couple of years have now come home to roost, helping Corus to nearly triple its pre-tax profit over last year's figure."

Since 2003, when the company introduced its Restoring Success programme, Corus has cut hundreds of jobs and changed working practices.

Earlier this year, the company reported its first profit.

In line with other operators, Corus has seen demand slow during the first half of the year, due to a combination of higher stocks in the supply chain and weak levels of consumption in the car and construction sectors.

As a result, the third quarter will see lower selling prices, but Corus forecast a recovery as the year progressed.