New orders boost Tata in UK and Europe
Steelmaker Tata has seen revenues and earnings surge in recent months, boosted by new orders for European car makers.
The European arm of the Indian steel giant saw delivery figures slip but revenues for its financial first quarter were up 28% on the same stage last year, at £1.7 billion, reflecting better market conditions.
Earnings of £152m were 63% up on last year, boosted by more favourable market and currency conditions and effort to improve the competitiveness of the UK operations. But higher raw materials costs and lower delivers meant earnings were down 36% on the previous quarter.
The company says it is also close to sealing a deal to restructure its UK pension fund. With steelmaking at Port Talbot and operations around the country, including its distribution headquarters at Wednesfield Steelpark, Tata Steel still employs 8,500 people in the UK despite the sell-off of a string of sites.
Most recently it sold part of its Hartlepool pipe mills to Liberty House Group as it focuses on its strip steel businesses.
Tata Steel's European managing director Hans Fischer said: “During the first quarter we have further strengthened our relationship with a number of key automotive customers.
"This includes becoming the number one supplier to a major German premium car manufacturer and winning significant orders for new car models being built by a number of major European and global manufacturers.
“Our focus remains on increasing sales of differentiated products in our European sales mix. Among the new products we launched last quarter were light weighting solutions for commercial vehicle body makers which will help reduce CO2 thanks to improved vehicle efficiency and organically-coated construction steels which are better able to resist corrosion.
“Our improving sales mix again strengthened our EBITDA result in the first quarter. While favourable market and currency tailwinds have continued, higher raw material costs have started to impact on our results.”
At Tata's Indian parent company, finance director Koushik Chatterje said: “Tata Steel Group witnessed an increase in revenues of 19% compared to last year, due to increased capacity in India and ongoing restructuring in Europe."
It meant the group swung back into the black with a £110m pre-tax profit. Consolidated earnings for Tata Steel were £590 million for the first quarter, an increase of 50% over the previous year.
