NEW DELHI/MUMBAI Tata Steel Ltd(TISC.NS) said it expected to take no further charges in Europe and has put no European assets up for sale, following a $1.6 billion writedown for the region in the past financial year due to weak demand.
The company reported its third straight quarterly loss on Thursday, which could lead to pressure for further cost cuts and closures, especially in its older plants in Britain.
Two-thirds of Tata Steel's 27 million tonne annual capacity is in Europe, where demand has fallen by almost a third since 2007. Various media reports have said it is exploring a sale of some of the assets.
"At this time, we have no business which is on the table," Chief Financial Officer Koushik Chatterjee told reporters. "But if there are opportunities or our strategy is different, it can happen."
"Severely depressed" conditions in Europe are expected to continue over the short to medium term, the company said in an earlier statement.
Its January-March net loss was 65.29 billion rupees, compared with a 4.33 billion rupee profit a year earlier. Net sales rose about 1 percent to 341.8 billion rupees for the fourth quarter.
Analysts had expected profit of 3.64 billion rupees on sales of 350.16 billion rupees, according Thomson Reuters I/B/E/S.
Investors and analysts have said Tata Steel should focus on its high-margin India operations, where its costs are far lower.
Chatterjee said Tata Steel had secured a loan of 220 billion rupees for its long-delayed 6 million tonne plant in Odisha. The company is already saddled with debt of about $10 billion, nearly double its market value.
Tata also said it would not proceed with a planned $5 billion steel plant in Vietnam.
The company, like bigger rival ArcelorMittal SA(ISPA.AS), has cut jobs and production to cope with the sluggish global steel market.
Tata Steel, part of the salt-to-software Tata group, bought a foothold Europe when it paid $13 billion for Anglo-Dutch steelmaker Corus in 2007, a deal that forced it to pile on debt.
(Reporting by Krishna N Das and Prashant Mehra; Editing by David Goodman and Jane Baird)
Trending On Reuters
The Reserve Bank of India (RBI) kept its key lending rate unchanged on Tuesday, leaving the door open for more easing but making that dependent on meeting a challenging inflation target for 2017. Full Article