Tata Steel Posted Third Consecutive Quarter of Losses

SEATTLE (Scrap Monster): India-based steel maker, Tata Steel, reported results for the initial quarter of the current fiscal. The company’s net losses further widened during the quarter. This is the third consecutive quarter that the company has reported losses.

The company posted consolidated net loss of Rs. 4,609.17 crore from continuing operations. This compares with net profit of Rs. 695.15 crore during the year-ago quarter. The results turned out to be a big disappointment when matched with the analyst estimate of Rs. 2,200 crore of loss for the quarter. The revenue from operations recorded nearly 30% year-on-year decline to Rs. 25,288.51 crore.

ALSO READ:

Tata Steel Set to Open Indian Steel Recycling Plant

Jobs at Risk in Tata Steel Port Talbot Steelworks

According to company press release, the subdued performance during the quarter in mainly attributed to the negative impacts of Covid-19 pandemic. The company was forced to scale down its manufacturing and distribution operations for a considerable period during the quarter. This has badly impacted its sales volume, mix and realization. Incidentally, Tata Steel’s operating level has recovered to nearly 90% by end-June.

The overall weakness in economic activities and sharp drop in spreads led impacted the performance of Tata Steel Europe during the quarter. This contributed to the huge drop in consolidated adjusted EBITDA.

The company’s steel production in Q1 dropped by more than one-third to 2.99 million tonnes (Mt) from the previous year.