Thursday, August 18, 2011

News: Tata Steel Europe performs steadily


The European operations of Tata Steel performed steadily in the first quarter of this financial year.

Latest financial results from the Indian steel maker showed that despite higher raw materials costs, EBITDA (earnings before tax) was $427m, 41.2% higher than the EBITDA recorded in the same period of the last financial year ($302m). This was boosted by the $134m arbitration settlement between Tata and certain offtakers of the Teesside Cast Products business.

Turnover was also up 20.5% to $4.6bn as was liquid steel production, which at 3.81m tonnes was 1.9% higher than the 3.73m tonnes in Quarter 1 of 2011 financial year. However, a sales volume at 3.50m tonnes was 2.2% lower than in last financial year.

The latest financial report from the company also stated how the European steel market suffered disruption from higher imports compounded by the Eurozone sovereign debt crisis and by forward economic indicators that are pointing to a manufacturing slowdown in Europe and North America. The company expects a "subdued summer quarter, though continuing strength in most of the Asian economies should be positive for global steel demand and pricing."

During the period, Tata took action to address costs in its Long Products hub in the light of continuing subdued construction activity. The strategy included a proposal to close or mothball parts of the Scunthorpe plant and put at risk 1,200 jobs at Scunthorpe and 300 jobs at its Teesside sites.

Following a large scale restructure and job losses in Rotherham in 2009, the company last year announced two new research facilities in the UK and an investment of £6.5m in two new vacuum arc remelting furnaces and additional testing equipment at its Stocksbridge site to assist in raising output of high-value aerospace steels. A move that will safeguard 2,000 jobs at Rotherham and Stocksbridge.

Under new MD & CEO, Dr Karl-Ulrich Köhler, Tata Steel Europe, is also establishing new sector-focused sales and marketing teams that are a key element of Tata Steel's reinvigorated European strategy.

Dr Karl-Ulrich Köhler, MD & CEO at Tata Steel Europe, said: "Tata Steel followed up the exceptional March quarter by delivering an encouraging performance in April-June, even though the weakening of the European steel market, which affected our deliveries, was made worse by rising imports.

"European steelmakers also faced the challenge of sharp raw material cost increases, which have largely been maintained into this quarter, despite the uncertain economic outlook. We continued to work on our strategy of strengthening customer relationships and cost leadership, including initiating a process that is designed to turn around the performance of our Long Products business and return it to profitability."

Tata Steel Europe website


Supported by:
More news...

  © Blogger template Newspaper III by 2008

Back to TOP