Tata Steel has reported a consolidated net loss of Rs 363.93 crore for the second quarter ended September 30, 2012 as against a net profit of Rs 212.43 crore for the same period last year.
The company reported consolidated net sales of Rs 33,867.32 crore for the given quarter as against Rs 32,507.45 crore last year. Earnings before interest, tax, depreciation and ammortisation (EBITDA) stood at Rs 2452.4 crore versus Rs 3021 crore. EBITDA margins on a consolidated basis was 7.2%.
On a standalone basis, Tata Steel India’s net sales grew to Rs 9,034.20 crore for the second quarter versus Rs 8,142.19 crore, corresponding quarter last year. Its standalone net profit fell to Rs 1350.81 crore as against Rs 1495.22 crore. EBITDA for Tata Steel India was Rs 2669 crore.
The profit fell on account of lower steel prices in India and higher raw material costs.
The costs of raw materials went up to Rs 2537.16 crore as against Rs 1889.04 crore, last year on account of higher coal prices. Steel prices over the second quarter fell by 4-6% because of falling international rates and lacklustre demand growth.
HM Nerurkar, managing director, Tata Steel said, “The Indian operations continued their steady performance against a backdrop of lacklustre demand in the marketplace and increasing imports.”
Koushik Chatterjee, group CFO, Tata Steel, said, “We will be commissioning the coke oven battery in the current quarter and the cost impact will be in our favour from the fourth quarter.”
Talking on the expansion plans at Tata Steel’s Odisha 3 million tonne steel plant, Nerurkar said that the plant is progressing on schedule and should start by the middle of 2014-15. On the Rs 6000 crore penalty imposed by Odisha government, he said that none of the allegations made by the state government were untrue. He said, “We did mining as per the laws of the land and have given our replies to the government.”
Tata Steel Europe suffered from the market slowdown and lower steel prices in Europe. The company reported an EBITDA loss of Rs 40 crore in the quarter ended September. Karl Ulrich Kohler, managing director and CEO, Tata Steel Europe said, “We are certainly not seeing major improvement in steel consumption this year in Europe.” The consumption is 25% less than the pre-crisis levels, he said quoting a report by the World Steel Organisation.
Kohler said that the slow improvement will continue over the next couple of years and the company is consistent in its strategy of controlling costs where it can. He said, “We have accelerated management actions in our lists of improvements.”
Tata Steel also reported Rs 42.68 crore on account of profit on sale of non current investments. Chatterjee said, “JVs relating to scrap in The Netherlands and other small entities were disposed off in the quarter as per the company’s strategy.”
At the end of the second quarter, net debt for Tata Steel Group stood at Rs 55,167 crore which went up from Rs 47, 657 crore at the end of March 2012.
The company repaid a debt of Rs 5,814 crore in the last quarter and raised Rs 8,985 crore. Chatterjee said, “We have met the 80% of debt repayment obligation for the year already.”
