JOIN USTata Steel posts Q2 net loss at Rs 2,719.80 cr
In effect, Tata Steel’s consolidated net loss for the quarter ended September 30, 2009 stood at Rs 2,719.80 crore as against a net profit of Rs 4,703.64 crore in the corresponding quarter during the previous year.
At the same time, the company’s consolidated net sales too dipped 42.63 per cent for the quarter to Rs 25,269.82 crore for the quarter ending September 30, 2009 as compared with Rs 44,050.07crore in the same quarter last year. So is the consolidated total income during the quarter under review decreased from Rs 44,255 crore in second quarter fiscal year 2009 to Rs 25,129.80 crore in second quarter fiscal year 2010.
The company explained that the Corus’ Teesside casting plant in the United Kingdom contributed majorly to the Group’s consolidated net loss with as much as $172.7 million (roughly Rs 800 crore) in the second quarter. All the same, Tata Steel Managing Director H M Nerurkar in his interaction with the media here said the second half will be a trend reversal on profitability basis with the company’s consolidated profit margin in October is on the positive side. The company also said European steel demand is recovering as it sold one million metric tonnes more in the second quarter on sequential basis.
However, Tata Steel was in red even for the first half of the current fiscal with a net loss of Rs 4,958.33 crore, while half yearly sales too were down by 44.58 per cent to Rs 48,450.33 crore.
Incidentally, when Tata Steel announced its standalone audited results last month on October 27, it had reported a net profit of Rs 1,349.91 crore.
The company in its notes accompanying the financial results stated that the actuarial gains and losses on funds for employee benefits (pension plans) of Corus – now known as Tata Steel Europe – have been accounted in “Reserves and Surplus” in the consolidated statements in sync with IFRS principles and permitted by Accounting Standard 21. But for this, the company’s consolidated loss after provisions would have been higher by Rs 2,282.54 crore during the first half of this fiscal and Rs 135.44 crore for the second quarter.
It also had a higher restructuring cost of Rs 911.32 crore during the second quarter as against Rs 363.27 crore in the comparable quarter last fiscal. However, the company was not forthcoming with explanations on this context.
However, the company’s total consolidated expenditure declined to Rs 26,176.76 crore in the quarter under review from Rs 37,100.80 crore in Q2’09, apparently prices of key raw materials like coking coal and iron ore have fallen markedly since the middle of 2008.
Following the consolidated result announcement this afternoon, Tata Steel’s scrip fell by 3.34 per cent and settled at Rs 543.45 on Bombay Stock Exchange.