Tata Steel reported a consolidated pre-tax loss of Rs 1,499.45 crore in the quarter ended March 31, 2020, against a profit before tax of Rs 4,252.50 crore in the corresponding period last year. This was on the back of weak revenue and a slew of exceptional items, which further dented earnings of the company.

In the final quarter of FY20, the company’s top line stood at Rs 32,866 crore, down 20 per cent from same period last year. This is because weak demand amid the slowing economic growth impacted domestic as well as overseas operations.

“While deliveries in India were marred by the nationwide lockdown in late March, margins improved on the back of stronger performance in the early part of the quarter. Tata Steel Europe showed a turnaround in performance with positive Ebitda for the quarter,” said T V Narendran, chief executive officer (CEO) and managing director (MD), at the earnings conference on Monday. Alongside, a slew of exceptional items (most of which were losses) comprising impairments, employee separation compensation and restructuring, among others, led to a loss of Rs 3,405.85 crore.

India operations contributed Rs 2,009 crore to the total loss reported under the exceptional items category. The single earnings item within the exceptional items category was profit on sale of subsidiaries and non-current investment, which was a meagre Rs 40.63 crore. In the period under review, the company reported a consolidated net loss at Rs 1,615.35 crore against a net profit of Rs 2,295.25 crore in the same period last year.

The Covid-19 outbreak has led to an unprecedented health crisis and has disrupted economic activities and global trade while weighing on consumer sentiment, said the company. Consequently, global steel demand is expected to be sharply lower in 2020 before a meaningful recovery in 2021.

The Centre imposed a stringent nationwide lockdown with effect from March 25, severely impacting manufacturing activities. Steel and mining were exempt from the lockdown measures, albeit subject to certain guidelines. However, steel demand was affected. This is because key steel consuming sectors struggled to operate amid the weakening economic activities, working capital constraints, shortage of manpower and logistical issues. The standalone loss before tax stood at Rs 96 crore in the March quarter against a profit of Rs 3,865 crore in the corresponding period last year.

The net loss at India operations widened further to Rs 437 crore as tax expenses worth Rs 341 crore dragged the bottom line. The company’s net profit in same period last year stood at Rs 2,491 crore.