MUMBAI (Commodity Online): The high input costs and weak price of steel in Europe has pulled down the net profit of Tata Steel Ltd (BSE: TATASTL : 500470, NSE: TATASTEEL ) by 89% in the second quarter(Q2) of the fiscal 2011-12.
The net profit stood at Rs 212 crore in Q2 against Rs 1979 crore in the same period last year.
"The margins have been impacted severely due to the higher raw material cost and lower average selling prices in our Europe operations and economic sentiment in Europe is clouded from the uncertainty coming from the euro zone crisis," said Karl-Ulrich Kohler, Managing Director and CEO, Europe, reported Business Standard.
Meanwhile, the net sales was up Rs 32,507.5 crore in Q2 2011 against Rs 28,091 crore last year. While the total expenditure grew to Rs 31,157 crore against Rs 26,052 crore in the corresponding quarter last year.
According to Hemant Nerurkar, MD, India and Southeast Asia, Tata Steel Ltd, the demand in sectors like auto and housing has gone down and steel prices are sluggish.
The group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) has fallen 34.5% to Rs 2,944 crore from Rs 4,497 crore last year. Whereas Tata Steel Europe registered a ebitda of Rs 505 crore, down by 42% from Rs 883 crore last year.
On BSE, the company traded down 4.19% or Rs 18.80 to Rs 430 on Friday, 11th November at 15:41 IST.
