Hit by lower steel prices and poor demand, Tata Steel reported a consolidated loss of Rs.363.93 crore for the second quarter of 2012-13 against a net profit of Rs.212.43 crore in the same period last year. Consolidated turnover was up 4.1 per cent at Rs.34,133 crore while earnings before interest, tax, depreciation and amortisation (EBITDA) was lower at Rs.2,452.4 crore (Rs.3,021 crore). Consolidated operating margin was at 7.2 per cent.

On a standalone basis, Tata Steel India’s net profit was down at Rs.1,350.8 crore (Rs.1,495.22 crore) on higher net sales of Rs.9,034.20 crore (Rs.8,142.19 crore). The operating profit was Rs.2,669 crore. H. M. Nerurkar, Managing Director, Tata Steel, said the profit fell on account of lower steel prices in India and higher raw material costs. “The Indian operations continued their steady performance against a backdrop of lacklustre demand in the marketplace and increasing imports.” During the period, higher coal prices resulted in higher raw materials costs at Rs.2,537.16 crore (Rs.1,889.04 crore).

Mr. Nerurkar said work on the company’s three million tonne plant at Kalinganagar in Odisha, was progressing and it should start operation by mid 2014-15.

Koushik Chatterjee, group CFO, Tata Steel, said, “We will be commissioning the coke oven battery in the current quarter and the cost impact will be in our favour from the fourth quarter onwards.”

The European operations were impacted by a market slowdown and lower steel prices. The company reported a loss of Rs.40 crore for the quarter at the operating level with deliveries at 3.42 million tonnes.

According to Karl Ulrich Kohler, Managing Director & CEO, Tata Steel Europe, “European steel demand and prices have weakened since the spring and this took its toll on our financial performance. We are certainly not seeing major improvement in steel consumption this year in Europe. We will see a slow improvement over the next few years.’’

Further, he said, “We have accelerated efforts to reduce costs in our control. We are putting a lot of effort in speeding up marketing activities and it is important that we create a strong position in Europe and elsewhere and will be supported by more than 20 new product developments this year.”