Tata Steel’s Q2 net income plunges 89%
In what clearly was a dismal quarter for Tata Steel - the largest steel-producer in India -, the company has reported a rather disquieting 89 percent plunge in its consolidated net profit for its fiscal second quarter.
It was due to declining demand, foreign-exchange losses and high raw material costs at the company's operations in Europe that Tata Steel witnessed a fall in net income to Rs. 2.12 billion ($42.2 million) - or Rs. 1.75 per share - in the quarter that ended on September 30. In comparison, the `same quarter last year' net income figures were Rs. 19.8 billion, or Rs. 20.63 per share.
The quarterly net income figures reported by Tata Steel were also notably below the expectations of analysts who - going by a Bloomberg survey - estimated the company to post a net income of Rs. 8.39 billion.
During the mentioned quarter, Tata Steel - which is the seventh-rank steelmaker in the world - also witnessed a 20 percent rise in total costs to Rs. 311.6 billion, as well as a 15 percent increase in raw material expenditure to Rs.
108.3 billion.
According to the information shared by Koushik Chatterjee - Group Chief Financial Officer at Tata Steel -, the company's exposure to foreign-currency convertible bonds suffered a Rs. 1.5 billion blow during the quarter, thanks largely to the depreciation the Indian currency against the dollar. Chatterjee also revealed that the net debt figures for Tata Steel stood at $9.2 billion at the end of September.
