An improved performance in European operations helped Tata Steel to offset the impact of negative conditions in the Asian market in the last three months of 2014, the company has said.
Pre-tax profits for the steel giant declined 58% year-on-year to Rs5.8bn (£61m) in the last quarter of 2014. This was driven by a drop in revenue of 8% to Rs336bn.
Koushik Chatterjee, group executive director, said the performance in the three months to December was affected by “adverse macro headwinds”, including a decline in commodity prices, an increase in Chinese exports and lower demand from the Indian market.
The company also faced significant regulatory challenges in India, which affected its raw material sourcing and put significant strain on its operations.
“However, stronger performance in the European business, various cost-saving measures across geographies and robust risk management of raw material security helped the company to limit the impact on its profitability,” he added.
In the European division, pretax profits and revenues decreased slightly compared with the same period in 2013. But Tata said performance improved on the previous quarter due to portfolio enhancement and lower input costs.
Karl-Ulrich Köhler, managing director and chief executive at Tata Steel in Europe, said: “We have just passed a significant milestone in this journey after launching the 100th product in our portfolio which has been achieved through a new product development process.
“European steel demand continued to recover in 2014 and should improve modestly again this year. But margins remain under pressure, with imports having risen from countries like China and Russia.”
The company is still conducting due diligence for the potential sale of the Long Products Europe business to the Klesch Group, a Swiss-based industrial giant.