Thursday, November 13, 2014

News: Tata Steel maintains financial performance in Europe

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Tata Steel, the steelmaker that has significant operations in Rotherham, has reported that its European operations have maintained the level of year-on-year improvement in financial performance established in the first quarter.

Reporting its financial results for the first half of the financial year and the quarter which ended on September 30 2014, the Indian-owned group saw turnover for the half year reach £4.09 billion, 3% up on the same period in the last financial year. Turnover for the second quarter was £2.02 billion, 4% down on the same quarter last year.

Profitability (EBIT / earnings before taxes) came in at £24.9m, a marked improvement from the loss of £14m in the first half of last year. Profits for the second quarter were £11.3m 17% down on the previous quarter but up from the loss of £15m in the second quarter of the 13/14 financial year.

Tata is continuing its focus on enhancing its product portfolio with 18 new products launched so far this year. The higher proportion of differentiated products in total sales has been maintained and Tata believes that the launches are enabling the company increasingly to take leadership positions in key areas of the markets it serves. In South Yorkshire, which is an important production base for aerospace steels, sites have been benefiting from significant investment and a focus on a high-quality portfolio programme.

In a report to the Indian stock exchanges, Tata sid that it "will remain focused on meeting growing demand for advanced high-value steels as we combat the twin challenges of sluggish European economic growth and rising imports."

After the period, Tata signed a Memorandum of Understanding with Klesch Group to undertake detailed due diligence and negotiations for the potential sale of its Long Products Europe business and associated distribution activities. It said this week that the potential sale would enable them to devote greater resources to pursuing a focus on strip steel customers. Narrow strip is produced at Brinsworth.

The group has also recently completed the restructuring and refinancing of its entire international debt portfolio, with much of it stemming from its acquisition of Corus in 2007.

Dr Karl-Ulrich Köhler, MD & CEO of Tata Steel in Europe, said: "Our financial performance again showed how our product portfolio enhancement continues to build on the progress we've made so far. We are on track with our new product launch plans and with our programme to raise the proportion of differentiated products in our sales.

"The potential sale of our Long Products Europe business and its associated distribution facilities would enable us to devote greater resources to pursuing our focus on strip steel customers. We will treat affected employees fairly and with respect throughout the due diligence process, and will consult fully with their representatives.

"We see headwinds constraining steel demand growth globally. In Europe we are increasingly concerned about the impact of rising imports, particularly from China, on EU steelmakers."

In September, Tata Steel announced that it will be creating a new R&D centre at the University of Warwick to better serve the needs of its current and future customers. This means that research will move away from The Swinden Technology Centre (STC) in Rotherham.

Tata Steel Europe website

Images: Tata Steel

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