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Tata Steel posted a consolidated net loss of Rs 603 crore for the three months ended December 31, 2011, compared with a net profit of Rs 1,003 crore in the corresponding period last year, due to its poor performance in Europe, and increasing raw material costs.
The company's consolidated turnover in the quarter under review stood at Rs 33,103 crore (Rs 29,089 crore). Steel deliveries in the quarter under review fell to 5.84 million tonnes from 5.9 million tonnes in the previous year's quarter, a note from the company said.
The company's net debt at the end of December 2011 stood at Rs 50,528 crore compared with Rs 46,627 crore at the end of March 2011, the company said. Tata Steel Europe posted an EBITDA loss of Rs 781 crore in the quarter under review, compared with a positive EBITDA of Rs 392 crore in the corresponding previous period. The Q3 FY'12 loss was mainly due to mark-to-market provisions on stock, the company said.
Cost-price squeeze
Tata Steel Europe's Managing Director and Chief Executive, Dr Karl-Ulrich Köhler, said: “The December quarter marked the height of the cyclical cost-price squeeze. Tata Steel was one of the first steel companies in Europe last year to start adjusting its output and configuration to the slowdown in the recovery. The turnaround programme in our Long Products business is well on course for completion by the end of the financial year, as planned. Similar measures have been taken elsewhere in the company, most recently at some of our tubes operations in the Netherlands and the UK.
Through our ‘Step Up & Save' initiative we are accelerating cash conservation in expectation of muted but stable demand in our core markets in 2012.”
The company posted Q3 sales of Rs 20,535 crore (Rs 17,523 crore), up 17.2 per cent, but down 3.0 per cent from the Rs 21,160-crore of Q2 FY'12, the company said.
Tata Steel Managing Director, Mr H.M. Nerurkar, said: “Our Indian operations delivered steady performance during the last quarter, with flat product volumes increasing three per cent year-on-year. Long product volumes dropped marginally due to planned shutdowns, but we increased our market reach, recording our highest ever quarterly retail long products sales. Company-wide cost saving measures benefitted margins in an otherwise difficult market. We expect steel demand to improve on expectations of the RBI relaxing monetary policy to aid growth and investment. An improvement in operating performance, coupled with a number of new marketing initiatives, should increase profitability at the South East Asian operations.”
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