Tata Steel plunges into Rs6,529-cr Q4 loss
23 May 2013
Tata Steel plunged into a consolidated net loss of Rs6,528.51 crore in fiscal fourth quarter ended 31 March 2013 hit by weak demand and depressed steel prices in Europe, against a net profit of Rs433.46 crore in the comparable quarter of the previous fiscal.
Consolidated net sales of the company barely rose 0.94 per cent to Rs34,180 crore in the fourth quarter ended 31 March 2013, against net sales of Rs33,860 crore in the same quarter of the previous fiscal year.
Tata Steel with an annual production capacity of 27 million-tonnes has one third of that capacity installed in Europe, its weakest market, where demand has fallen by almost a third since 2007, forcing Tata Steel to write down goodwill and assets by of Rs8,356 crore ($1.6 billion) in the last financial year.
On a standalone basis, Tata Steel reported a 16 per cent drop in net profit at Rs1,309.21 crore in the fourth quarter ended 31 March 2013 against a net profit Rs1,560.51 crore in Q4 of FY12.
The company's net sales, however, rose 13 per cent to Rs10,602.88 crore in Q4 of FY13 against Rs9,375.91 crore during Q4 of FY12.
"Despite weakening market conditions in the last year, the Indian operations posted a strong growth in production and deliveries. The brownfield expansion is fully ramped up and we are committed to commissioning the Greenfield plant at Odisha on schedule," Tata Steel managing director H M Nerurkar said.
"Europe's economic deterioration last year reversed the modest recovery in European steel demand that had been going on since 2009 and our deliveries fell as a consequence," Tata Steel Europe MD & CEO Karl-Ulrich Kohler said.
In a separate statement, Tata Steel said that performance of its European operations has improved during the last quarter and its quarterly deliveries stood at 3.42 million tonnes in the fourth quarter compared to 3.02 MT of the third quarter.
Tata Steel said the euro zone crisis has pushed current steel demand is almost 30 per cent lower than the pre-2008 financial crisis level.
"These severely depressed conditions are expected to continue over the short-to-medium term and have led to a downward revision of cash flow expectations and the valuation of the Groups' European operations," it added.