Tata Steel, the world's seventh-largest steel maker reported a 89 per cent drop in the second quarter’s consolidated net profit, weighed down by rising raw material costs and weak prices in Europe. Its net profit stood at Rs 212 crore against Rs 1979 crore in the same period last year.
Net sales grew to Rs 32,507.5 crore against Rs 28,091 crore last year. Total expenditure, too, grew to Rs 31,157 crore against Rs 26,052 crore in the corresponding quarter last year."The margins have been impacted severely due to the higher raw material cost and lower average selling prices in our Europe operations," said Karl-Ulrich Kohler, Managing Director and CEO, Europe.
"Economic sentiment in Europe is clouded from the uncertainty coming from the euro zone crisis," he said.
The group’s earnings before interest, taxes, depreciation and amortisation dropped 34.5 per cent to Rs 2,944 crore from Rs 4,497 crore last year. MD, India and Southeast Asia, Hemant Nerurkar said, "Demands in sectors like auto and housing has gone down and steel prices are sluggish."
Tata Steel India posted a turnover jump of Rs 8,212 crore, up 15 per cent. The ebitda stood at Rs 2,793 crore, down 17 per cent from Rs 3,362 crore in the same period last year.
Tata Steel Europe posted an ebitda of Rs 505 crore, down 42.8 per cent from Rs 883 crore last year. Sequentially, the ebitda was down 73.5 per cent. Turnover at the European operations grew by 19 per cent to Rs 21,160 crore.