Tata Steel Q2 net loss at Rs 2700cr, sees profit in H2

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Tata Steel Q2 net loss at Rs 2700cr, sees profit in H2

Tata Steel on Thursday came out with disappointing Q2 results. Quarterly losses in net profits stood at Rs 2707 crore. But the company is hopeful of seeing profits ahead.

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Tata Steel has announced its second quarter FY10 results. The company's Q2 numbers were below street expectations, its consolidated net loss at Rs 2,707 crore versus loss of Rs 2,208 crore, quarter-on-quarter (QoQ). The company's net sales were up 9% though at Rs 25,269 crore versus Rs 23,180 crore, QoQ.

At a press conference, the Tata Steel management said the company turned EBITDA positive in the October quarter. "October to March would see a trend reversal in profitability terms," it said, adding, "In Q2, costs were lower by Rs 600 crore compared to the previous quarter."

Tata Steel has about USD 2.2 billion as cash in hand, its net debt stands at USD 9.8 billion while gross debt stands at USD 12.8 billion, it said. "We started the year with with about USD 12.4 billion of gross debt and then took USD 1.3 billion as new loans this year out which we about USD 1 billion of loans."

The management said it was focussing on restructuring debt. "Our target is to reduce gross debt by USD 2 billion. We do not have large material debt repayment in the next 12 months."

The management also spoke about the global steel market and said countries like Brazil, India and China were propelling growth in consumption, adding that steel usage in India grew 11% in H1.
"Also, manufacturing output is stabilizing in Europe but at lower price levels. Europe is also seeing improvement in industrial orders," the company said. Steel stocks worldwide, it added, were low.

Tata Steel has a global presence when it acquired Anglo-Dutch steelmaker Corus making the combine the fifth largest steel producer in the world.
Global steel prices plummeted during the second half of 2008 as the global financial crisis took a toll on commodity prices amid a demand slump but have recovered somewhat since.