Thursday, November 14, 2013

News: Continued improvement for Tata Steel in Europe

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Publishing its latest financial results, Tata Steel reported that operating performance in Europe has continued to improve.

The Indian-owned steelmaker, that operates important sites in Rotherham and Stocksbridge, published results for the first half and second quarter ended September 30 2013.

EBITDA (earnings before tax) in Europe was £55m for the second quarter of the year, down from the previous quarter but a vast improvement on the loss of £5m for the same period last year. This helped net profits for the overall group to reach £89m in the second quarter, compared to a loss of £36m in the same period last year.

Tata said that this was due to the revival of production following the reopening of the Port Talbot blast furnace and from the continuing efforts to reduce costs and make the European operation an all-weather business.

Deliveries in Europe in the second quarter increased by 10% to 3.46 million tonnes from 3.14 million tonnes in Q1, and by 1% from 3.42 million tonnes in the second quarter of last year. Tata said that "stabilising operations led to best like-for-like quarterly production for five years."

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.

Sales of differentiated products rose by 13% in the first half of the financial year compared to the previous year, highlighting the success of the strategy in a fiercely competitive market.

Following significant investment already in South Yorkshire, last month Tata confirmed that it would invest a further £15m in a cutting-edge VIM furnace at Stocksbridge that will allow Tata Steel's Speciality Steels business, which already supplies steel to aircraft engine and airframe makers, to further develop relationships with its customers and expand its product portfolio in aerospace and oil & gas industries.

Dr Karl-Ulrich Köhler, MD & CEO of Tata Steel in Europe, said: "The investments in our asset base are proving their worth in what continues to be a challenging market. We are focused on maintaining our momentum and will continue to strengthen partnerships with customers by offering them more premium products and services."

Last month, Tata Steel announced that nearly 500 jobs are to go at its plants in Scunthorpe, Workington and Teesside, as part of restructuring proposals for its Long Products division amid a prolonged downturn in the market for products such as construction steel.

Tata expects European steel demand to slowly pick up later this financial year and to continue to grow as steel using sectors recover. It added that "quality of product and service will make the difference for our customers" and that there would be a continued focus on business performance improvements and rigorous cost control.

Tata Steel Europe website

Images: Tata Steel

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