 "Tata Steel loss biggest in three years")
Decreased demand in Europe and closure of a blast furnace affected the revenues, down four per cent to Rs 32,163 crore from Rs 33,357 crore in the year-ago period. Europe deliveries for the quarter were lower at 3.02 million tonnes (mt) compared with 3.35 mt in the corresponding quarter last year. “Tata Steel posted disappointing results, with both sales and net profit below our expectations,” said Bhavesh Chauhan, senior research analyst, Angel Broking.
Koushik Chatterjee, group chief financial officer of the company, said that demand contraction in Europe was a significant structural concern. He also said that the December quarter was one of the slowest due to seasonal demand factor. “The closure of the blast furnace added to it,” he said. The blast furnace however relighted last week.
The company's total deliveries for the December quarter remained flat at 5.83 million, as compared to 5.84 million in the same quarter last year. Deliveries in the Indian market increased to 1.89 million tonnes as compared to 1.62 million tonnes.
“The Indian operations performed steadily despite the overall weak steel demand situation in India. We ramped up production from Jamshedpur and we expect to achieve rated capacity utilisation levels by the end of current financial year. We mobilised significant resources on site of Kalinganagar project,” said HM Nerurkar, managing director of Tata Steel.
Angel Broking expects higher volumes to come from the profitable India operations during 2014-15. Tata Steel believes that government reforms and reduction in interest rates will help boost domestic steel demand. “The general market condition is slow but structurally India has significant potential for growth as we continue to import steel. This is an indication that supply can come,” said Chatterjee.
Its net finance charges shot up by 16 per cent to $175 million (Rs 941 crore) from $151 million (Rs 812 crore). Its net debt stood at Rs 57,981 crore. It is also planning to raise around Rs 12,000 crore for the phase I of its mining project in Orissa.