The company is understood to be in talks with Germany steel giant ThyssenKrupp over a possible merger with its European arm, which includes its United Kingdom steelmaking plant at Port Talbot as well as Black Country operations in Wednesfield, Walsall, Brierley Hill and Wednesbury.
Advertisement
Profit was expected at Rs 292 crore on revenue of Rs 29,110 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Tata Steel on Monday reported a 10-fold jump in its net loss to Rs 3,183 crore in the quarter ended June 30, as compared to a net loss of Rs 317 crore in the corresponding quarter a year ago. It discontinued operations of its long product business in the United Kingdom and completed its sale to Greybull Capital on May 31, it said.
Interestingly, the standalone performance of Tata Steel was positive.
The company is doubling its annual production capacity at its steel plant in Kalinganagar in the eastern state of Orissa to six million tons.
As of June 30, 2016, net debt increased to Rs 75,259 crore as compared with Rs 71,087 crore in March 31, 2016.
In the United Kingdom it is in the process of seelling its speciality steels arm and pipe mills in Hartlepool while it has invested in its site in IJmuiden in Holland, including a new metals caster. It said in its statement Monday that it was still in discussions with the bidders.
“Despite muted market demand, our India business improved its underlying EBITDA performance by 310 bps compared to the previous quarter”, Tata Steel Group Executive Director Koushik Chatterjee said.
The steel major’s operating profit or EBITDA (earnings before interest, tax, depreciation and amortisation) at 21 per cent was higher than the year-ago period due to improved operating performance in India, Europe and South East Asia.
“Our differentiation strategy is also starting to create more robustness in terms of higher-value sales, and we sold our highest percentage of differentiated products in June”.
“We remain committed to investing in our customers through new product development and enhancing our manufacturing capability”. Consolidated revenues also fell as the demand for steel went down in some European markets.
In July, we started construction of a new slab caster in IJmuiden [Dutch steel plant] which will enable us to make more higher-strength steels, particularly for vehicle manufacturers. “That’s why it’s vital we continue every effort to improve our competitiveness”.
On strategic developments in Europe business, the firm said, “Tata Steel UK is now progressing with the divestment of the specialty steel business and the pipe mills in Hartlepool”.
Advertisement
The company, which has been hit hard in Europe due to a fall in steel demand, excess capacity and rising imports from China, recorded a loss of 32.96 billion rupees from discontinued operations related to the sale of its long products business in the United Kingdom to Greybull Capital LLP in May.
