For the financial year ended 31 March 2013, the steel giant reported a consolidated net loss of Rs7,057.62 crore as against a net profit of Rs5,389.77 crore, largely due to the $1.6 billion impairment
Tata Steel reported a consolidated net loss of Rs6,528.51 crore for the quarter ended March 2013, as it took a Rs8,355.91 crore one-time impairment on non-current assets, primarily related to its European operations.
The Tata group company had reported a consolidated net profit of Rs433.46 crore for the same quarter of 2011-12.
Its standalone net profit, which is Indian operations of Tata Steel, also declined by over 16% to Rs1,309.21 crore during the quarter vis-a-vis Rs1,560.51 crore of Q4 of FY12 as it made a one-time provision of Rs686.86 crore on diminution in value of investments/doubtful advances.
In a separate statement, Tata Steel said that the performance of its European operations has improved during the last quarter and its quarterly deliveries stood at 3.42 million tonnes (MT) in the fourth quarter compared to 3.02 MT of the third quarter.
Noting that the Eurozone crisis has pushed European economy into a recession, Tata Steel said that current steel demand is almost 30% lower than the pre-2008 financial crisis level.
“These severely depressed conditions are expected to continue over the short-to-medium term and have led to a downward revision of cash flow expectations and the valuation of the group’s European operations,” it further said.
Reflecting these conditions, Tata Steel took an impairment charge of Rs8,356 crore in the last quarter.
“This is a non-cash charge and does not affect any of its financial covenants and its funding position. A significant portion of this impairment charge relates partly to the goodwill created on the acquisition of Corus Group plc in 2007...” the company said.
The impairment also includes the effect of write down of assets in the ferrochrome business in South Africa and the mini blast furnace in Tata Steel Thailand.
Few days back, Tata Steel had announced that it will be taking $1.6 billion non-cash write-off in its financial numbers for the last quarter.
The company’s consolidated net sales rose less than 1% during the quarter at Rs34,180.05 crore as compared to net sales of Rs33,860.08 crore of January-March period of FY12 due to subdued steel demand, particularly in Europe.
Tata Steel’s net sales in India rose over 13% during the quarter at Rs10,602.88 crore vis-a-vis Rs9,375.91 crore of Q4 of FY12.
For the financial year ended 31 March 2013, the company reported a consolidated net loss of Rs7,057.62 crore as against a net profit of Rs5,389.77 crore, largely due to the $1.6 billion impairment.
Net profit of Tata Steel’s Indian operations also declined by over 24% to Rs5,062.97 crore in the last fiscal vis-a-vis Rs6,696.42 crore in FY12.