India's Tata Steel, one of the world's biggest steelmakers, on May 23 swung to a quarterly net loss from a profit a year ago due to falling demand in its key European market. Tata Steel reported a consolidated net loss of 65.29 billion rupees ($1.18 billion) for the fourth fiscal quarter which ended March, compared to a profit of 4.33 billion rupees in the same period a year earlier.
It was the steelmaker's third successive quarterly loss. Tata Steel, which bought Anglo-Dutch steel giant Corus for $13.7 billion in 2007, has been struggling to improve its European unit's performance in the face of the eurozone debt crisis.
"The macro-economic conditions in Europe continue to remain challenging," Tata Steel's group chief financial officer Koushik Chatterjee told reporters. Europe accounts for about two-thirds of sales and production for the steelmaker, which has an annual capacity of 28 million tonnes.
Earlier this month, Tata Steel, part of the tea-to-salt Tata Group conglomerate, announced a $1.6 billion asset writedown due to a slump in demand in Europe. The writedown came just five months after businessman Cyrus Mistry took over the helm of the group from Indian industrialist Ratan Tata, who masterminded the purchase of Corus - then India's largest overseas acquisition.
"Europe's economic deterioration last year reversed a modest recovery in European steel demand which was going on since 2009 and our deliveries fell as a consequence," said Tata Steel Europe chief executive Karl-Ulrich Kohler. The company has operations in India, Europe and Southeast Asia.