India's Tata Steel has dropped into the red after wiping £1bn off the value of its European arm, largely due to the writedown
India's Tata Steel has plunged into the red with losses of £840m after wiping £1bn off the value of its European arm, which employs 18,500 people in Britain.
The overall post-tax figure for the group represents a sharp fall from the previous year's £642m profit, and is largely accounted for by the writedown.
Tata said "severely depressed conditions" in Europe and Britain had left steel demand almost 30% lower than 2008 pre-recession levels – leading to last week's move – though underlying performance in the region had improved with increased volumes in the last quarter. The company did not give a pre-tax profit figure for its European arm. The overall group figure, excluding the impairment, was £387.7m in the black, down from £621.6m.
Unions have said the company's woes will worry British staff at sites including Port Talbot, Rotherham and Scunthorpe, which are still reeling from 900 job cuts last year. Tata, which bought Anglo-Dutch steel company Corus in 2007 for £6.2bn, has endured a tough time during the downturn as demand from construction and car-making dived, forcing thousands of layoffs and plant closures.
Its UK employees represent more than half of the company's European workforce. The firm announced its latest wave of redundancies in November, including 600 in south Wales. Tata said deliveries were down in its European operations over the year, largely due to repairs and outages, but that the re-lighting of a blast furnace at Port Talbot after a £220m rebuild helped in the fourth quarter.
The company said that it was continuing a programme of restructuring, cost-cutting and efficiency while also taking on 500 apprentices in Britain over the past couple of years.