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Construction : Web Exclusive | November 2012 | Source : Construction Update

High cost causes Tata Steel to post consolidated loss

For the quarter ending September 2012, the Tata Steel posted a consolidated net loss of Rs 363.9 crore compared to a net profit of Rs 212 crore for the year-ago period.

The company attributed losses to lower steel prices and higher raw material costs, coupled with the poor performance of its Europe division, Tata Steel Europe, which was formerly called Corus.

Consolidated net sales of the company rose to Rs 33,867 crore for the said quarter compared to Rs 32,507 crore last year. Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 2,452 crore versus Rs 3,021 crore. Ebitda margins were 7.2 per cent.

The firm's net sales on a standalone basis grew to Rs 9,034 crore for the second quarter versus Rs 8,142 crore in the year-ago period. Its standalone net profit fell to Rs 1,350.81 crore from Rs 1,495.22 crore, while Ebitda stood at Rs 2,669 crore.

The cost of raw materials went up to Rs 2,537.16 crore from Rs 1,889.04 crore last year, on account of higher coal prices. Steel prices over the second quarter fell by four-six per cent on falling international rates and lacklustre demand growth.

According to HM Nerurkar, Managing Director of Tata Steel, the Indian operations continued their steady performance against a backdrop of lacklustre demand in the marketplace and increasing imports.

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