Tata Steel consolidated net down 42%

Tata Steel, India’s largest steel maker, recorded a 42 per cent fall in consolidated quarterly profit on the back of lower capacity utilisation in Corus, its European arm. The latter provides more than two-thirds of Tata Steel’s total output.

The company reported net profit of Rs 472 crore in the quarter ending December 31, compared with a consolidated net profit of Rs 814 crore reported a year earlier. Consolidated net sales for the period fell to Rs 26,069 crore from the Rs 32,515 crore year earlier, a 20 per cent decline.

Corus has plants in the UK, the Netherlands, Germany, France and Belgium. Capacity use was 81 per cent in the third quarter. It had already said it would mothball much of its Teesside Cast Plant in Britain, which would affect the jobs of 1,600 workers, after four companies cancelled long-term buying contracts last April. The closure is slated, for now, by the end of this month.

“We lost $220 million to run the plant (from then) till now; we can’t go on like this,” said Kirby Adams, managing director and chief executive office of Tata Steel Europe, blaming the loss of jobs on the companies that breached the contract. The company earlier diverted internal contracts and used ad hoc orders from customers to keep the plant open.

On a consolidated basis, Tata Steel had gross debt of $12.9 billion at the end of the December quarter. It would be paying Rs 1,600 crore of debt in the current quarter, informed Kaushik Chatterjee, group chief financial officer.

The shares of Tata Steel were up by 2.2 per cent to Rs 549.8 on the Bombay Stock Exchange on Tuesday. The company announced the results after market hours.