 "(From left to right) T V Narendran, Managing Director, India, Koushik Chatterjee, Group Executive Director (Finance and Corporate) and South East Asia and Karl- Ulrich Kohler, MD & CEO, Tata Steel, Europe at the announcement of the company's seco")
The Mumbai-based steelmaker had clocked a net profit of Rs 1,254.33 crore in the year-ago period.
Its consolidated total income, however, fell 18% to Rs 29,304.69 crore in the July-September quarter this fiscal from Rs 35,777.11 crore in the same quarter of 2014-15, Tata Steel said in a BSE filing.
While, the company's Indian operations reported strong growth in production and deliveries in the September quarter, its European operations, particularly in the UK, significantly worsened as Britain continues to witness surge in imports and decline in competitiveness.
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Tata Steel India and South East Asia Managing Director T V Narendran said: "Despite ongoing downturn in global commodity prices and seasonal weakness in demand, we were able to increase our deliveries by 9% during the quarter on the back of strong sales to the auto sector and a higher proportion of value added products."
The underlying EBIDTA for the second quarter of 2015-16 increased by 14% to Rs 1,963 crore. Reported EBITDA for the quarter rose to Rs 4,771 crore, including a gain of Rs 2,808 crore on the sale of quoted investments, the firm said in a statement.
Tata Steel Europe MD & CEO Karl-Ulrich Kohler said: "Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness."
Tata Steel in the UK is facing a structurally challenging environment of weak domestic manufacturing demand, surging imports, a strong pound and steep regulatory and business costs, it said.
Given the rapid and sharp deterioration in the underlying buisness environment in the UK, Tata Steel UK, an indirect subsidiary of Tata Steel has taken a non-cash impairment charge of the Strip and other businesses in the UK, it said.
The impact of the above along with restructuring charges and other provisions of the UK business has been reflected in the consolidated financial statements of the company to the extent of Rs 8,669 crore, it added.
The triennial valuation process of British Steel Pension Scheme has been completed. The consequential treatment of the same has been incorporated in the consolidated financial statements of the firm as a one time credit of Rs 8,570 crore during the September quarter.
Shares of Tata Steel today fell by 4.33% to settle at Rs 225.60 apiece at the BSE. The results were announced after market hours.
