Tata Steel reports fall in 1H profits

Firm continues to assess options for its Long Products business in the UK

Tata Steel has reported a 22% fall in pre-tax profit to 30.2 million rupees (£301 million) for the six months ended 5 November following the continuing decline of market conditions in Europe.

The company's half-year revenues also fell by 17% to 596 billion rupees in the six-month period.

Tata Steel reported that market conditions in Europe, primarily in the UK significantly worsened in the second quarter as the region continues to witness surge in imports and declining competitiveness of the manufacturing sector due to weak industrial demand, strengthening of the sterling and adverse regulatory and business conditions.

Dr Karl-Ulrich Köhler, managing director and chief executive of Tata Steel in Europe, said: “Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness.

“We have made three restructuring announcements in the UK since July leading to reduced volume and costs. We are working with the UK government to urgently secure a more competitive trade and regulatory environment and we will support our employees affected by restructuring. We are also continuing to assess all the strategic options for our Long Products business.”

Tata Steel called on European governments to ensure the European Commission upholds international trade rules “firmly and more speedily”. 

Köhler added: “Surging volumes of dumped imports, including from countries that subsidise their steelmakers, are massively distorting competition. But we will not let this challenging marketplace divert us from our objective of making advances for our customers by developing higher-value products which give them a competitive edge. We will continue to optimise our Strip Products business and look to realise the world-class potential and strategic locational advantages at our IJmuiden facility.”