Tata Steel Ltd. has reported net loss of Rs 6,528.5 crore for the quarter ended March 31, 2013, as against the profit of Rs 433.5 crore in the year-ago period primarily due to the non-cash impairment charge of Rs 8,356 crore.
"The Eurozone crisis has pushed regional economies in Europe and UK into a recession and the current steel demand is almost 30 per cent lower than the pre-2008 financial crisis level. These severely depressed conditions are expected to continue over the short-to-medium term and have led to a downward revision of cashflow expectations and the valuation of the Groups' European operations," the Tata Group-led company said in a filing to the Bombay Stock Exchange.
Reflecting these conditions, the Group took an impairment charge of Rs 8,356 crore in fourth quarter of the fiscal 2013. This is a non-cash charge and does not affect any of its financial covenants and its funding position. A significant portion of this impairment charge relates partly to the goodwill created on the acquisition of Corus Group plc in 2007 and partly to the assets of the business units that have been adversely affected by the severe contraction in demand, especially in the construction sector. The balance impairment relates to the assets in Tata Steel KZN in South Africa, Tata Steel Thailand and Tata Metaliks for Redi Plant, the filing added.
Besides, total income from operations increased marginally by 2 per cent to Rs 34,650.5 crore during January-March quarter 2013, from Rs 33,998.6 crore earned in the corresponding quarter previous fiscal.
Shares of the company were trading at Rs 311.80 a piece, up 4.11 per cent as against previous close on BSE at 11:50 hours.