Calcutta, Feb. 9: Tata Steel Group, Indias largest steel maker, suffered a loss of Rs 602.6 crore in the third quarter, following a write down of inventories of finished goods and raw materials in its European operations.
The company wrote off Rs 741.70 crore during the third quarter to recognise the fall in the market prices of these products. It had written off Rs 222.63 crore in the previous quarter, totaling the mark-to-market loss at Rs 990.28 crore so far this fiscal. It had posted a Rs 1,003-crore profit in the third quarter of last year.
Tata Steel Europe managing director & CEO Karl-Ulrich Köhler highlighted the difficult environment the company was going through.
The December quarter marked the height of the cyclical cost-price squeeze, he said in a statement adding that the company was taking measures to restructure businesses (long products, tubes) and conserve cash.
Köhler said he expected core steel demand to remain stable during 2012.
While European operations swung to EBIDTA (earning before interest, depreciation, tax and amortisation) loss of Rs 781 crore in the third quarter compared with a profit of Rs 392 crore in the same period last year, the Indian operations witnessed marginal decline.
It posted Rs 2,604 crore EBIDTA, a financial indicative of core operational environment, in India, down by 8 per cent from the same period last year of Rs 2,832 crore.
Tata Steel India, the standalone company, posted a net profit of Rs 1,421 crore compared with Rs 1,513.46 crore in the same period last year.
Tata Steel managing director H.M. Nerurkar said Indian operations delivered steady performance during the last quarter. We expect steel demand to improve on expectations of the Reserve Bank of India relaxing monetary policy to aid growth and investment, he said.
The consolidated turnover for the third quarter was Rs 33,103 crore compared with Rs 29,089 crore a year ago.
The company said the 2.9-million-tonne expansion project in Jamshedpur was expected to be commissioned in this quarter. Steel deliveries in the third quarter fell marginally to 5.84 million tonnes from 5.9 million tonnes in the same period last year.
Net debt at the end of December 2011 was Rs 50,528 crore on a consolidated basis compared with Rs 46,627 crore as on March 31, 2011.
The result came after the Indian markets closed for trading where the Tata Steel stock was up 0.1 per cent to Rs 451.10 compared with 0.7 per cent rise on the BSE today.
Hindalco Industries today reported a little over 2 per cent dip in net profit for the third quarter of the current fiscal at Rs 450.69 crore because of increased cost of raw materials.
The company, an industry leader in aluminium and copper production, had clocked a net profit of Rs 460.34 crore in the same quarter last fiscal.
The benefits of higher volume and realisation have been negated by the cost surge of over Rs 300 crore, it said.