Tata Steel’s consolidated net profit was down 89 per cent at Rs 517 crore in the June quarter due to lower production and weak demand in Europe. Net sales grew two per cent to Rs 33,548 crore.
Turnover of Tata Steel Europe in the first quarter of this fiscal was down marginally at Rs 20,406 crore against Rs 20,535 crore recorded in the same period last year. In euro-term, sales declined 15 per cent.
Deliveries declined by nine per cent to 3.21 million tonnes (mt) against 3.55 mt last year. EBITDA (earnings before interest, tax, depreciation and amortisation) was down 67 per cent at Rs 620 crore against Rs 1,907 crore recorded last year.
Karl-Ulrich Köhler, Managing Director, Tata Steel Europe, said in a statement, steel demand in Europe was lower than expected and prices have weakened.
The company seeks to mitigate the effects of this with tight cost control and emphasis on increased product differentiation.
The Group’s steel deliveries fell by nine per cent to 5.68 mt against 6.05 mt logged last year. Net debt increased to Rs 54,020 crore against Rs 47,657 crore as of March 2012.
HIGH COST IN INDIA
On a standalone basis, the company’s net profit was down 39 per cent at Rs 1,357 crore even as sales jumped 13 per cent to Rs 8,820 crore, largely due to higher cost. Total expenses rose 29 per cent even as output was almost flat at 1.77 mt.
EBITDA was down 12 per cent at Rs 2,791 crore in the June quarter against Rs 3,156 crore in the same period last year.
However, on a sequential basis, both sales and profit were down six per cent and 13 per cent, respectively, reflecting the weakening demand. Deliveries were down 10.3 per cent when compared to the March quarter.
H.M. Nerurkar, Managing Director, Tata Steel, said the company’s performance in India was robust against the backdrop of weakening demand and increased competition.
Tata Steel South-East Asia turnover was up one per cent at Rs 3,372 crore against Rs 3,332 crore in Q1 FY12. Deliveries declined by eight per cent to 0.72 mt against 0.78 mt in Q1 FY2.
Though the company announced the financial performance after market hours, the shares on the BSE were down one per cent at Rs 396 on Monday.
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