BENGALURU (Reuters) – India’s Tata Steel Ltd reported an almost 83% slump in fourth-quarter profit on Tuesday, hurt by falling demand in Europe and weak steel prices.
The steelmaker’s consolidated profit was 17.05 billion rupees ($208.4 million) in the fourth quarter ended March 31, compared with a profit of 97.56 billion rupees a year earlier.
Steel exports to Europe have been weak in the last couple of quarters as recessionary pressures hurt demand. European operations, which account for roughly 35% of total revenue, fell about 17% to 220.36 billion rupees.
“In Europe, margins were broadly similar on a QoQ (quarter-on-quarter) basis as improvement in costs was offset by drop in revenues,” Tata Steel said in a statement.
Total revenue from operations fell more than 9% to 629.62 billion rupees.
Falling steel prices and rising coking-coal costs have squeezed the industry’s profits since the first quarter of last fiscal year. Tata Steel reported a 6% increase in the cost of raw materials consumed.
Delivery volumes in Europe fell over 11%, but inched up 0.6% in India, the company said last month.
Tata Steel is the first among the major steel players to report quarterly earnings. Rival JSW Steel will report results on May 19.
Separately, the company also said the board had recommended a dividend of 3.6 rupees per share.
Tata Steel closed 2.2% higher ahead of its results.
($1 = 81.8250 Indian rupees)
(Reporting by Varun Vyas in Bengaluru; Editing by Sonia Cheema and Dhanya Ann Thoppil)
