The world's sixth-largest steelmaker, Tata Steel, said on June 25 annual net profit dropped 60 percent, hit by restructuring costs and lower demand for steel amid the global economic downturn. The company's consolidated full-year net profit to the end of March 2009 fell to 49.5 billion rupees (1.02 billion dollars) from 123.5 billion rupees a year earlier.
Turnover rose to 1.47 trillion rupees from 1.31 trillion rupees in the previous 12 months, it said in a statement to the Mumbai stock exchange. Restructuring costs in Europe of some 40 billion rupees and the lower cost of steel ate into profit margins, the company added.
Sales volume was also lower, reflecting sluggish market conditions in the second half, especially from Europe which saw a severe contraction in demand, the statement said. That has led to Tata Steel's Corus unit announcing the possibility of up to 2,045 job losses and the beginning of consultation on whether to cut more jobs in Britain and the Netherlands.
Corus chief executive Kirby Adams told a news conference in Mumbai that talks with the unions had only just begun, saying he could not go into specifics about any redundancies until the 90-day consultation period was over. But he added that "more risks" were seen in the engineering and steel business.
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