Tata Steel revenues fall by a fifth as lockdown hits output
TATA STEEL has plunged deeper into the red as coronavirus hammers demand for its products and a tough lockdown in India further threatens production in the company’s home nation.
Revenues at the business reported fell by a fifth to 337.7bn rupees (£3.6bn) in the quarter to the end of March compared to a year earlier, taking it to a 15bn rupee pre-tax loss – three times the size of the loss for the previous quarter.
Over the full year, sales fell 11pc to 1.4 trillion rupees, resulting in a 2.3bn rupee loss, compared with a 159bn rupee profit the year before.
The company’s dive into the red was bigger than analysts had been expecting and came as Tata Steel reels from tough Indian restrictions which have severely limited travel for the country’s population of 1.3bn people. International offshoots of the business – which include the giant steelworks at Port Talbot in South Wales – have also been hit by measures to control the pandemic.
Companywide deliveries of steel dropped slightly on the previous year to 26.7m tons, although production rose by 1.4m tons to 28.5m tons.
Posting the results, the company – part of the Tata conglomerate which also owns Jaguar Land Rover – said that lockdowns were only in force for a small part of the financial period covered by the results. This means far bigger losses are likely to come.
The firm expects a sharp fall in demand this year, followed by a major recovery in 2021.
Talks are being held with the UK authorities about a potential £500m loan to protect Tata’s operations across Britain, which employ about 8,500 staff.