Steel major Tata Steel posted a consolidated net loss of Rs 2,009 crore in FY10, against net profit of Rs 4,950.90 crore in the previous fiscal, amid poor demand from across the globe following the global recession.
The company, however, expects a better working in the current fiscal following higher demand from auto and construction sectors, the key drivers of growth.
Consolidated turnover also decreased by 31 per cent to Rs 1,02,393 crore for the fiscal ended March 2010, from Rs 1,47,329 crore in the previous fiscal due to reduced capacity utilisation in Europe following the global financial crisis.
On a standalone basis, the company reported a net profit of Rs 5,046.8 crore for the fiscal, yet down nearly 3 per cent from Rs 5,201.74 crore in the previous fiscal. But, standalone income rose to Rs 25,021 crore in FY10 from Rs 24,315 crore.
The dismal performance was due to the beating that the global steel industry took last year as demand from auto and construction sectors slumped amid the global recession.
But the company now sees some signs of recovery in the last two quarters of FY10 amid revival in demand from auto and construction sectors and price hike by Tata Steel Europe.
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"The strong and stable growth trajectory for the domestic economy is forecast to continue in FY11, which bodes well for the domestic steel demand, though there are inflationary pressures arising on the supply side," Tata Steel managing director Hemant Nerurkar told reporters here. The company is hopeful of a 14 per cent growth in FY11, Nerurkar said.
Commenting on the steel price scenario, Nerurkar said prices are coming down in the international market. However, he expects prices to recover as raw material prices are going up. "We are accelerating our efforts to increase self-sufficiency through projects overseas," Nerurkar said.
During the year, Tata Steel Europe has made remarkable turnaround by achieving growth in market share, a higher value-added mix, significant and lasting cost reduction and in Q4 the first profit after tax in 18-months period.
Turnover at Tata Steel Europe during the fourth quarter of 10 increased by 2 per cent at Rs 17,091 crore compared to Q3 of FY10 on account of a 4 per cent increase in deliveries and higher average selling prices.
"The decisive measures we have been taking to combat the 35 per cent slump in European steel demand last year have succeeded in dramatically improving the company's financial and safety performance," Tata Steel Europe Managing Director and CEO Kirby Adams said.
Tata Steel Europe has completed a 60-million pound investment to recycle process gases from the steel meltshop at Port Talbot. The new facility commissioned this month reduces Port Talbot's carbon dioxide emissions by 240k tpa, Adams said.