Tata Steel Posts Unexpected Loss on Falling European Demand
The net loss, including Tata Steel Europe Ltd., was 3.64 billion rupees ($66.5 million) in the three months ended Sept. 30 from a profit of 2.12 billion rupees a year earlier, Mumbai- based Tata Steel said today in a statement. The median profit estimate of 24 analysts in a Bloomberg survey was 2.27 billion rupees. Sales rose 4.2 percent to 338.7 billion rupees.
Weaker economies and overcapacity have forced steel mills to cut prices. The average cost of the international benchmark hot-rolled coil that Tata Steel produces fell 19 percent in the quarter. ArcelorMittal (MT), the world’s biggest steelmaker, last month posted the lowest quarterly profit in almost three years.
Tata Steel declined 3.3 percent to 390.55 rupees by the close of Mumbai trading, its biggest drop since Sept. 5.
Costs rose 6.9 percent to 331.58 billion rupees. Expenses for employee benefits increased 14 percent to 45.39 billion rupees and power costs 19 percent to 14.05 billion rupees.
“Europe has been significantly affected by falling steel prices,” Koushik Chatterjee, group chief financial officer, told reporters on a call. “The demand conditions are fairly uncertain and muted.”
Steel deliveries fell 0.8 percent to 6.07 million metric tons from 6.11 million tons. In India, output increased 9.3 percent to 1.87 million tons, Tata said on Oct. 9.
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