Advertisement

  1. ITV Report

Tata Steel posts £358m net loss in second quarter

Photo: Ben Wright/PA Wire

Tata Steel has slumped to a net loss of £358 million - or 31.8bn rupees - for the quarter to June amid continued uncertainty over its UK operations.

The Indian conglomerate was stung by losses linked to discontinued operations, including its UK businesses, saying that liquid steel production in Europe fell by 15.7% compared to the same period last year.

Tata sold its European long products division based in Lincolnshire to Greybull Capital during the quarter for a nominal sum.

It still owns the giant Port Talbot steel works, which employs more than 4,000 workers, and thousands more at other plants in Shotton, Hartlepool, Rotherham and Stocksbridge.

After deciding to sell its remaining UK business, Tata announced in July that it was putting that process on hold while it pursued a European joint venture.

One of the biggest stumbling blocks has been the legacy of the British steel pension fund that Tata inherited when it bought the business in 2007.

Tata said talks about the pension deficit were continuing with all relevant parties including the UK Government, trustees and unions.

In Europe, the positive impact of the structural restructuring undertaken in the UK in the last six months along with a weaker pound, cost reduction measures and an effective hedging strategy on raw material imports have enabled the business to report better performance for the quarter.

With the completion of the Long Products Europe divestment, Tata Steel Europe will focus on being a premium strip player and the management and employees of Tata Steel Europe continue to strive to structurally improve the business performance.

The strategy for exploring further strategic consolidation in Europe is a step in that direction.

Tata Steel UK also continues to be engaged with several stakeholders including unions, the Trustee and the UK Government to find a structural solution to the pension exposure of the UK business.

– Koushik Chatterjee, Tata's Group Executive Director

More on this story