Tata Steel posts wider than expected Q4 loss, says UK business sale process on
MUMBAI: Tata SteelBSE 2.13 % reported a consolidated net loss of Rs. 3213.76 crore for the March quarter against a loss Rs. 5674.29 crore in the year ago period.
The loss came in wider than expected as the company took impairment charges and write downs of Rs. 2857.79 crore due to restructuring in UK and some purely performing investments overseas.
Analysts were expecting a loss of Rs. 1027.08 crore on a revenue of Rs. 30337.51 crore, according to a Bloomberg poll.
Net sales for the quarter fell 12.51% to Rs. 29164.37 crore.
Tata Steel sold 6.94 million tonnes (mt) of steel during the quarter versus 7.06 mt in the same quarter last year.
Earnings before interest, taxation, depreciation and amortisation came at Rs. 3200 per tonne versus Rs. 2700 per tonne in the year ago period helped by a recovery in international steel prices and some support from recently implemented protectionist measures by the government.
Tata Steel expects to sell a million tonne more steel in India as it ramps up Kalinganagar plant in Odisha. It has spent Rs. 3695 crore on the project of the total Rs. 11486 crore capital expenditure in the whole financial year.
The company expects a capital expenditure of less than Rs. 10000 crore in the current financial year. It had a consolidated net debt of Rs. 74000 crore as on March 31.
Tata Steel said the sale process of its UK assets is on going with some bidders continue their due diligence while some have submitted their final bids.
"Some bids have come in and some have sought clarifications. Once we get them all we will review and rank them," said Koushik Chatterjee, group executive director for finance and corporate affairs.
The steelmaker is urgently looking for a buyer amid continuous losses and poor demand in its UK business.
Tata Steel decided to put its entire UK operations on the block in March, giving up on efforts to revive the business it bought as part of the takeover of Corus at the peak of the commodity boom in 2007.
The UK government is doing its best to attract more buyers for the business in a bid to protect 11000 direct and indirect jobs on the line. It is ready to buy a minority stake of as much as 25% in Tata Steel's UK business to support the sale and offer hundreds of millions of pounds in debt relief.
Sanjeev Gupta's Liberty House, management buyout team Excalibur, Sajjan Jindal-led JSW Steel, investment fund Greybull Capital, private equity firm Endless, Chinese firm Hebei Iron and Steel Group and American billion Wilbur Ross are in the running for Tata Steel's UK assets.
British Prime Minister David Cameron today said there have been an "encouraging number of serious bids" for Indian steel giant Tata Steel's loss-making UKassets but warned there were "no guarantees" for a successful conclusion to save thousands of jobs.