Europe a drag, India business strong: Tata Steel

Tata Steel, the world’s seventh largest steel maker reported higher-than-expected consolidated net loss of Rs 602.67 crore for the December quarter compared with Rs 1,003 crore profit last year, as demand for steel fell sharply in crisis-hit Europe.

The debt crisis in Europe, which contributes about two- third of Tata’s production, has cut steel demand and prices, which is indeed a matter of concern says Koushik Chatterjee, group CFO Tata Steel to CNBC TV 18.

According to an Economic Times report , Global use of the alloy will rise 4.5 percent in 2012, the slowest in three years,as perthe median estimate of 14 steelmakers, analysts and traders surveyed by Bloomberg.

However, Chatterjee says that Tata Steel’s India operations delivered steady performance during the December quarter and he expects the trend to continue.

“We expect volumes from our Europe division to remain flattish going ahead, but the turnaround programme in the region is well on course for completion by the end of this fiscal,” he said

Tata Steel Europe posted an EBITDA loss of Rs 781 crore in the December quarter, compared with a positive EBITDA of Rs 392 crore last year.

Tata Steel was one of the first steel companies in Europe last year to start adjusting its output and configuration to the slowdown in the recovery. Similar measures have been taken elsewhere in the company, most recently at some of the company’s tubes operations in the Netherlands and the UK, he added.

Watch the full report on CNBC TV 18: