Wednesday, August 14, 2013

News: Tata Steel records turnaround in net profit

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Publishing its latest financial results, Tata Steel has recorded a strong turnaround in net profit for the quarter ending June 30 2013, on the back of robust performance by the Indian operations and improved performance at the European operations.

The Indian-owned steelmaker, which employs just over 2,000 people in South Yorkshire at sites including Stocksbridge and Rotherham, recorded that an improvement in underlying performance at its European operations was maintained during the period with EBITDA (earnings before tax) for the first quarter of the financial year at the European operation up by 27% on the previous quarter to £91m and 25% up on the same quarter last year.

This helped the overall Tata Steel Group to report a consolidated net profit of 11.39 billion rupees (£120m) for the first quarter, up from 5.97 billion rupees (£62m) in the same period a year earlier.

Deliveries from Europe totalled 3.14 million tonnes in the quarter, slightly lower than the 3.21 million tonnes in same period last year largely due to soft market demand.

Production increased in Europe following upgrades at Port Talbot and IJmuiden and a further £1.3m development at Stocksbridge was confirmed last month.

The results also showed that there was a 5% improvement in the proportion of differentiated products in the June quarter. Last year, Tata Steel Europe outlined a new strategy to target demanding industries, like automotive, aerospace, mechanical engineering and construction. South Yorkshire is home to the production of specialist steel used in aerospace and a restructured bar business now focusing on supplying hi-tech products, but a the cost of 110 Rotherham jobs.

Dr Karl-Ulrich Köhler, MD & CEO at Tata Steel Europe, said: "Our European facilities recorded higher production volumes after we completed some major plant refurbishment last year, which gave us a more stable production platform and greater operational flexibility. As a result we are better placed to supply our customers with the high-quality steel they demand.

"We see signs that our strategy is enhancing bottom-line performance, despite continued subdued European demand. There have recently been encouraging signs of improving economic conditions in some European economies, the UK in particular, and we are poised to capitalise should these translate more strongly into increased demand from steel-intensive sectors."

The latest results filed at Companies House show that Tata Steel Europe reported a record loss of £1.176 billion for the year ending March 31. This compared to a loss of £846m in the previous financial year. The accounts also stated that: "In order to maintain its ability to successfully compete in the long term, the group is, therefore, undertaking a number of initiatives, including a strategic review of its asset portfolio."

Tata Steel Europe website

Images: Tata Steel

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