- POSTED: 14 Aug 2014 02:52
Indian giant Tata Steel reported on Wednesday (Aug 13) that quarterly group net profit slid a bigger-than-expected 70 percent, hit by one-off charges, but added its European operations were picking up.
NEW DELHI: Indian giant Tata Steel reported on Wednesday (Aug 13) that quarterly group net profit slid a bigger-than-expected 70 percent, hit by one-off charges, but added its European operations were picking up.
Despite a "healthy improvement across geographies", Tata Steel said the performance was not enough to overcome one-time costs which pushed earnings sharply lower than financial market forecasts.
Net profit slid to 3.37 billion rupees (S$68.7 million, US$55 million) in the first financial quarter to the end of June from 11.39 billion rupees a year earlier on net sales that climbed 11 percent to 364.27 billion rupees. The earnings undershot estimates by analysts who had forecast that Tata Steel would post a net profit of just over nine billion rupees.
"Operating performance improved across all geographies," said the company, part of the sprawling Tata tea-to-cars conglomerate, adding in Europe it would keep concentrating on reducing expenses and improving operations.
But a steep fall in the cost of raw materials such as iron ore and coking coal and more stable steel prices failed to offset one-off costs and a bigger tax payment.
"European steel demand is moving in the right direction," said Karl-Ulrich Kohler, chief executive of Tata Steel in Europe, where the company ranks as number-two steel producer. "Though demand remains well below levels we would regard as healthy, we can see greater stability emerging in the markets we serve," he added.