Tata Steel's net loss widened to Rs 3183 crore; Europe business declines by 12%
Leading steel-maker Tata Steel saw weak consolidated June quarter ended 2016 (Q1FY17), performance led by seasonal headwinds and a slowdown in a large steel consumer sector.
The company's consolidated net loss widened to Rs 3183.07 crore against net loss of Rs 317 crore in the same preiod of previous year.
However, Q1FY17 net loss has narrowed from Rs 3320 crore of the preceding quarter.
Total income from operations was at Rs 26,406.10 crore, declining by 5.77% year-on-year (yoy) and 4.17% quarter-on-quarter (qoq).
While consolidated operating profit (EBITDA) was positive at Rs 3320 crore, increasing by 21% yoy and 65% qoq due to improved operating performance across India, Europe and South East Asia. It's operating profit margin was at 12.38%, expanding by 281 basis points (bps) yoy and 520 basis points qoq.
T V Narendran, Managing Director of Tata Steel said, " Seasonal headwinds and a slowdown in a large steel consuming sector like real estate affected steel demand in the quarter. While regulatory changes have supported stem the flood of imports, domestic supply has increased and added to the competitive pressure.
On geographic front, it was only Tata Steel's Indian business that contributed growth of 1.46% to Rs 10,323.48 crore in this quarter.
While remaining geographical areas tumbled such as - Tata Steel Europe declined by 11.87% to Rs 13,100.47 crore (from Rs 14,865.39 crore in June 2015), while South east Asian operations was at Rs 2224.73 crore down by 15.50% yoy and Rest of the world (ROW) business stood at Rs 147.27 crore down by 35.24% yoy.
Interestingly, the standalone performance of Tata Steel was positive.
On standalone basis, the company's net profit of Rs 575.43%, registered growth of 35.28% yoy. While operating profit was up by 15.51% yoy to Rs 2221.36 crore.