MUMBAI: India's Tata Steel, the world's seventh-largest steelmaker, on Thursday announced a consolidated quarterly loss, from profit a year earlier, as raw material costs rose and demand from Europe weakened.
The firm, which bought Anglo-Dutch company Corus for $13.7 billion in 2007, reported a net loss of 6.03 billion rupees ($120 million) for the three months to December, from a profit of 10.03 billion rupees a year earlier.
The earnings -- the company's first quarterly loss in more than two years -- were far below analysts' forecasts of a near-3.2 billion rupee profit.
The firm, part of the sprawling tea-to-vehicles Tata Group conglomerate, had reported a steep 89-percent drop in net profit in the previous quarter.
The global steel industry is facing an uncertain outlook and slowing growth due to the sovereign debt crisis in Europe.
In a statement to the Bombay Stock Exchange, Tata Steel said sales rose 15 percent to $6.5 billion.
The company has operations in India, Europe and Southeast Asia.
Its standalone India operations showed 13 percent sales growth at 83.82 billion rupees, while European sales slid by three percent to $3.87 billion on a sequential quarterly basis.
Tata Steel Europe chief executive Karl-Ulrich Köhler said: "The December quarter marked the height of the cyclical cost-price squeeze."
Managing director H.M. Nerurkar said he expects "demand for steel to improve on expectations of India's Reserve Bank of India relaxing monetary policy, to aid growth and investment."
India's growth has been slowing and will probably stand at 6.9 percent in the year to March -- its slowest in three years -- after an aggressive string of interest rate hikes.
The RBI hiked interest rates 13 times after March 2010 to battle high inflation, but has kept rates on hold since December last year with inflation showing signs of moderating.
Corus was rebranded as Tata Steel Europe in September 2010.
Comments
Comments are closed for this article.