Tata Steel group reports $585 million Q2 net loss

Tata Steel Ltd, the world's eighth-largest steelmaker, today reported a consolidated net loss of Rs2,707 crore ($584.7 million) for the quarter ended 30 September 2009 after minority interest and share of profit of associates, compared with a profit of Rs4,772 crore a year earlier.

Tata Steel, which bought the No2 European steelmaker Corus in 2007, said the results of the July-September 2009 quarter have been impacted by the weak performance of its European unit, Corus.

Consolidated net sales fell to Rs25,270 crore from Rs44,199 crore a year earlier.

Group steel deliveries rose 17 per cent to 6.22 million tonnes from 5.34 million tonnes in Q1 FY'10 while consolidated group turnover (net sales plus other operating income) rose 9 per cent to Rs25,395 crore ($5,280 million).

With the worst of the downturn over, Tata Steel Europe (TSE) moved into positive EBITDA at the start of the third quarter. The various programmes undertaken in the first half of the financial year (2009-10) have resulted in cost-savings to the tune of around Rs3,750 crore ($780 million) against a savings target of around Rs7,500 crore (£1 billion) for the financial year, the release said.

Profit before interest, taxes, depreciation and amortisation (EBDTA) on a consolidated basis rose throughout the first half, doubling in Q2 FY'10 to Rs402 crore ($84 million) from Rs204 crore ($42 million) in Q1 FY'10. The Q2 figures in particular were lower than they would otherwise have been because of a number of one-off considerations, the release noted.