Engineering news
Tata Steel has posted a loss for the final quarter ending 31 March, as overseas demand for steel weakened and cheap imports hit domestic prices.
The company reported a loss of 56.74 billion rupees (£572 million) in the three months, compared with a profit of 10.36 billion rupees a year earlier.
Total revenue fell about 21% to 333.37 billion rupees in the three month period.
Tata Steel’s results were also hurt by an impairment charge of 44.76 billion rupees during the quarter relating to its long products business in the UK.
Tata said the non-cash impairment was due to the “supply imbalance facing the global steel industry, significant volatility in iron ore and coal prices in the past 12 months and the current view of long term forecast of steel and its raw material prices”.
Dr Karl-Ulrich Köhler, managing director and chief executive of Tata Steel in Europe, said: “We continued to make steady progress on our strategic transformation to become a customer-orientated, financially sustainable company despite weakening market conditions in the last six months.
“Our financial performance improved due to our market differentiation strategy, as well as wider market spreads and continued cost control. We launched 35 new products for customers during the year, including a premium quality surface finish for car body panels, a lighter-weight construction steel and a new steel grade for tractor wheels. We also invested in our customers through the opening of a new heavy-gauge decoiler in South Wales, a new finishing line in IJmuiden, a new light gauge centre in the UK’s West Midlands and the acquisition of several service centres in the Nordic region.”
He said the company's European production and deliveries were stable, despite being constrained by reduced demand in the second half and operational issues such as a power blackout in the Netherlands in the fourth quarter.
"In the coming year we see opportunities to further improve sales through higher precision. EU demand is forecast to grow modestly again and the EU steel industry is in a stronger position to benefit than it was pre-crisis. But surging Chinese exports look set to remain a serious concern," Köhler added.
Meanwhile, thousands of its UK-based workers are to be balloted for industrial action in a row over pensions.
Unite said its 6,000 members at the company will vote in the coming weeks on whether to launch a campaign of action, with the result due on 5 June. Members of Community and the GMB are already voting on strikes, with the result set to be announced next week.
Unite national officer for steel Paul Reuter said: "Following five months of intensive negotiations where the trade unions offered savings to the company of £850 million,Tata Steel UK has decided that it is ideologically wrong for employees, who have worked hard in an extremely strenuous and physically demanding environment, to be able to retire with the pensions that they were originally promised.
"Tata Steel UK is consulting our members on its proposal to close the pension scheme and to financially penalise workers and their families in retirement. Our members have made it clear that the proposed changes are totally unacceptable.
"Unless Tata Steel UK enters into further meaningful negotiations that would preserve the pension scheme, then the first national industrial action in the industry for 30 years would seem inevitable," Reuter added.
As of December 2014, the British Steel Pension Scheme had 143,000 members, with 17,004 making up employee members and 91,264 making up pensioner members. As of November 2014, the assets of the scheme were valued at about £13.6 billion and continue to increase.