Tata Steel report surprise profits weeks after cutting 1,200 jobs

TATA STEEL has reported profits of £301m in a surprise second half performance, despite announcing that 1,200 UK jobs would be axed only weeks ago.

Pretax profits fell 21.6% to £301m, which was above expectations for the India-based firm.

The Tata Steel Group posted half year revenues, to 30 September, of £5.96bn (596bn rupees) a drop of 17% on the same period last year.

In the UK, they blamed a “surge in imports and declining competitiveness of the manufacturing sector due to weak industrial demand” and that in response to this, a restructure was necessary. That restructure involved the loss of 1,200 jobs at its UK manufacturing sites, primarily in Scunthorpe, where 900 jobs from their Long Products division were axed.

Dr Karl-Ulrich Köhler, chief executive of Tata Steel in Europe, said: “Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness.

“We have made three restructuring announcements in the UK since July leading to reduced volume and costs. We are working with the UK government to urgently secure a more competitive trade and regulatory environment and we will support our employees affected by restructuring.

“We are also continuing to assess all the strategic options for our Long Products business.

Across Europe we are calling on governments to ensure the European Commission upholds international trade rules firmly and more speedily. Surging volumes of dumped imports, including from countries that subsidise their steelmakers, are massively distorting competition.”

The firm said that its Indian operations were affected by “subdued manufacturing activity” in the country, and imports from China, Japan and Korea.