Tata Steel on Thursday reported a consolidated loss of R2,127 crore in the three months to December against profit of Rs 157.11 crore a year ago, mainly due to low steel prices and weak sales.
Net sales fell 17.5% in Q3FY16 to Rs 27,818 crore due to lower steel prices in the quarter, below analysts estimates.
According to Bloomberg consensus the company was expected to report consolidated loss of Rs 2127 crore on sales of Rs 28,336 crore. Underlying EBITDA of the company declined 69% from a year ago to Rs 838 crore.
Over the last year, global steel prices have declined sharply from around $460 per tonne to around $260 per tonne in line with the glut in supply and the sharp decline in raw material prices.
Koushik Chatterjee, group executive director (Finance and Corporate), said, “The current business conditions for the global steel industry are extremely challenging with confluence of elevated imports across regions, currency headwinds and depressed market sentiments affecting Tata Steel Group’s profitability. We are witnessing significant unfairly priced imports into countries like the UK, India and South East Asia which has disrupted the pricing discipline in most markets.”
In the quarter profit in Indian operations declined 48.5% from a year ago to R453 crore.
Indian steel demand remained subdued post monsoon quarter due to sluggish uptick across key steel consuming sectors like construction, general engineering and infrastructure. Rural demand also remained muted. India witnessed a surge in net imports from countries such as Japan, Korea and China which grew by 143% yoy in 9M FY’16 and 67% yoy in Q3 FY’16.