Impairment charges put Tata Steel in Rs 6,511-cr loss

New Delhi:Tata Steel reported a consolidated net loss of Rs6,511 crore in the second quarter of 2023-24 as the company was hit by impairment charges and shrinking margins in its operations in Europe.The company had made a net profit of Rs1,297 crore in the same quarter last year.Tata Steel reported a consolidated total revenue from operations of Rs55,681 crore as against Rs59,877 crore reported in the year-ago period.

“India business generated a higher margin of around 20 per cent and EBITDA stood at Rs6,841 crore. In Europe, margins moderated especially in UK business while Netherlands business was broadly stable on a quarter-on-quarter (QoQ basis). Revenue per ton was lower in both geographies. However, improved costs in the Netherlands led to broadly similar margins,” Koushik Chatterjee, Executive Director and Chief Financial Officer, said in a statement.

The company said that it has assessed the potential impact of the Electric Arc Furnace route baseddecarbonisation project and restructuring in Tata Steel UK. Subsequently, it has undertaken an impairment charge of Rs12,560 crore in standalone financial statements and Rs2,746 crore in consolidated financial statements.

Tata Steel has also taken a charge towards restructuring and other provisions of Rs3,612 crore in consolidated financial statements.In September, the UK government agreed to give a grant of £500 million to help Tata Steel decarbonise its Port Talbot project. Tata Steel will have to invest the balance in the total capital cost of £1.25 billion.

Tata Steel Europe (TSE) recorded revenues of Rs18,846.7 crore in the quarter as against Rs21,558.8 crore a year ago.In the company’s India business, revenue was Rs33,922 crore down from Rs34,642.8 crore a year earlier. EBITDA was Rs6,841 crore.