“Tata Steel Ltd., India’s biggest producer, posted a third-quarter loss almost four times greater than analysts estimated as the economic slowdown in its biggest market spurred a decline in demand and prices.
The loss, including that of unit Tata Steel Europe Ltd., widened to 7.63 billion rupees ($142 million) in the three months ended Dec. 31 from 6.03 billion rupees a year earlier, the Mumbai-based company said today in a statement. The median loss estimate of 25 analysts in a Bloomberg survey was 1.99 billion rupees. Sales fell 3.5 percent to 318.2 billion rupees.
Steel-industry earnings have slumped as Europe’s economic crisis saps demand and slower Chinese growth weighs on commodity prices. Steelmakers in Europe, where Tata makes two-thirds of its production, are grappling with excess capacity, falling prices and rising operating costs. The region has a capacity to make about 210 million metric tons of steel a year, while demand in a “normal market” is 150 million to 160 million tons, according to industry lobby group Eurofer.
Total costs were 313.3 billion rupees, compared with 323.5 billion rupees. Mumbai-based Tata Steel earned 558.6 million rupees from sources other than its main business, while finance expenses were little changed at 10.3 billion rupees.
Tata Steel’s global depositary receipts in London fell as much as 6.7 percent to $6.795 and traded at $6.845 as of 11:06 a.m. local time. The Mumbai-traded shares closed down 2.3 percent to 376 rupees before the earnings were announced. The benchmark Sensitive Index gained 0.2 percent today.