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Released September 21, 2020 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Tata Steel Europe Limited (TSE) has posted a pre-tax loss of £857 million ($1.1 billion) for the 12 months ended March 31, 2020, sparking new fears for the ongoing viability of its troubled operations in the U.K. and Netherlands.
The company, which employs around 20,000 people in Europe, is a subsidiary of India's Tata Group and saw revenues for the same period fall from just under £7.1 billion ($9.1 billion) in 2019 to £6.2 billion ($8 billion) in 2020.
In a statement, the directors of Tata Steel Europe said: "The severity and length of the downturn in steel demand in Europe remains unpredictable due to the unprecedented nature of the COVID-19 pandemic. Therefore the financial projections of the Group, and the effect on the Group's liquidity, are difficult to predict with a high level of certainty. For these reasons, while the directors have a reasonable expectation that the Company and Group has adequate resources to continue operating for the foreseeable future, they have concluded there exists a material uncertainty caused by the impact of the COVID-19 pandemic on the future funding requirements of the Group which may cast doubt on the the Company's and Group's ability to continue as a going concern."
According to the World Steel Association, before the COVID-19 pandemic EU steel demand was expected to recover slightly by 1.2% with margins expected to improve as EU oversupply fell. However, the impact of COVID-19 will see demand for 2020 fall by 6.4%, dropping to 1,654 million tonnes (Mt). In 2021, steel demand is expected to recover to 1,717 Mt, an increase of 3.8% over 2020.
Tata Steel is the U.K.'s largest steelmaker and the third-largest in Europe. In May, Industrial Info reported that TSE had requested roughly £500 million ($606.5 million) in government support to weather the COVID-19 pandemic, according to the Minister of Parliament for Aberavon, Stephen Kinnock. For additional information, see May 25, 2020, article - U.K. Steelmakers Need More Government Cash to Survive. The government turned down the request and is now believed to be working with a number of European investment banks to create a sustainable rescue plan for the company.
Industrial Info is tracking a number of initiatives the company is looking at to secure a future for its operations and in July reported that it might replace the blast furnaces at Port Talbot in Wales with electric arc furnaces. The potential move, which could result in thousands of job losses, would reduce its carbon footprint and avail itself of hundreds of millions of pounds in government support from the Project Birch fund, designed to support "strategically important enterprises".
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The company, which employs around 20,000 people in Europe, is a subsidiary of India's Tata Group and saw revenues for the same period fall from just under £7.1 billion ($9.1 billion) in 2019 to £6.2 billion ($8 billion) in 2020.
In a statement, the directors of Tata Steel Europe said: "The severity and length of the downturn in steel demand in Europe remains unpredictable due to the unprecedented nature of the COVID-19 pandemic. Therefore the financial projections of the Group, and the effect on the Group's liquidity, are difficult to predict with a high level of certainty. For these reasons, while the directors have a reasonable expectation that the Company and Group has adequate resources to continue operating for the foreseeable future, they have concluded there exists a material uncertainty caused by the impact of the COVID-19 pandemic on the future funding requirements of the Group which may cast doubt on the the Company's and Group's ability to continue as a going concern."
According to the World Steel Association, before the COVID-19 pandemic EU steel demand was expected to recover slightly by 1.2% with margins expected to improve as EU oversupply fell. However, the impact of COVID-19 will see demand for 2020 fall by 6.4%, dropping to 1,654 million tonnes (Mt). In 2021, steel demand is expected to recover to 1,717 Mt, an increase of 3.8% over 2020.
Tata Steel is the U.K.'s largest steelmaker and the third-largest in Europe. In May, Industrial Info reported that TSE had requested roughly £500 million ($606.5 million) in government support to weather the COVID-19 pandemic, according to the Minister of Parliament for Aberavon, Stephen Kinnock. For additional information, see May 25, 2020, article - U.K. Steelmakers Need More Government Cash to Survive. The government turned down the request and is now believed to be working with a number of European investment banks to create a sustainable rescue plan for the company.
Industrial Info is tracking a number of initiatives the company is looking at to secure a future for its operations and in July reported that it might replace the blast furnaces at Port Talbot in Wales with electric arc furnaces. The potential move, which could result in thousands of job losses, would reduce its carbon footprint and avail itself of hundreds of millions of pounds in government support from the Project Birch fund, designed to support "strategically important enterprises".
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
