A weaker European market and lower steel prices pushed Tata Steel into the red as the company posted a massive consolidated net loss of `763 crore in the December quarter as against a net profit of `603 crore a year ago.
Koushik Chatterjee, chief financial officer, said the demand conditions in Europe continued to be weak and offered no signs of revival anytime soon.
“In the first nine months of the fiscal, the company raised 100 million pounds in Europe through disinvesting smaller portfolios that helped remove the redundancy and complexity of the businesses,” he said.
Tata Steel’s consolidated earnings before interest tax depreciation and amortisation (Ebidta), or operating profit, for the third quarter dropped 8% year on year at Rs2,252 crore.
However, it was a little above the corresponding period last year when the company clocked an Ebitda of Rs2,023 crore.
Chatterjee said while Europe will continue to contract, the Indian market is expected to slowly turn around with more infrastructure projects being approved, which will help maintain steel demand in the country.
The company, which is building a six million tonne per annum (mtpa) steel plant at Kalinganagar in Odisha, will raise Rs12,000-13,000 crore debt from domestic banks to fund the first phase of the project.
While this will further add to the current debt of Rs57,981 crore, Chatterjee said the company will look at further drawdowns only when the first-phase funding is completed. For the December quarter, turnover fell 3% to Rs32,107 crore.