Port Talbot posts healthy profit but no relief for under-threat staff

Port Talbot

Sources familiar with finances at the sprawling operation in South Wales revealed it made a £5m profit in June, reversing the £1m a day loss it was making six months ago, reports The Telegraph.

Tata Steel UK – which includes the speciality and pipe businesses that are up for sale – also made a profit at the group level.

The news has caused frustration among the 11,000 staff, whose future has been in doubt since the company’s Indian parent put the UK business up for sale in March, as it buckled under the pressure of cheap imports, global overcapacity, high energy costs and punitive taxes.

The sale of Port Talbot was suspended in July because of uncertainty caused by the Brexit vote, leaving staff no clearer as to what their future held. Tata later said it still planed to sell the speciality and pipe businesses, and was exploring a tie-up with European rival Thyssenkrupp for what remained.

A spokesman for steelworkers’ union Community said: “UK steelworkers are helping turn the tide in this steel crisis, but their biggest challenges may still lie ahead. Thousands of families are still in the dark about their future and what Tata has planned for the business.

“If Theresa May is serious about having an industrial strategy, she should start by making sure that Britain’s steel industry not only survives this crisis, but gets the investment it needs for a sustainable, profitable future.”

The return to profit was aided by the post-referendum fall in the value of sterling and a rise in global steel prices. Sources close to Tata said that while the core improvement was down to staff efforts, other temporary factors helped.

They cautioned that the improvement was still not enough to ensure Port Talbot could operate as a standalone business able to ride out business cycles.

While the future of Tata’s staff in South Wales remains in doubt, the 600 working in the pipe business in Hartlepool could soon be more secure, with hopes high that a sale could be announced as soon as early September.

It is understood that commodity group Liberty House is hopeful of taking on the business, and is also vying to buy Tata’s speciality business which has 1,200 staff in Stocksbridge and Rotherham in South Yorkshire.

A spokesman for Tata said: “We don’t disclose financial results beyond our normal public reporting. The management team and the employees in the UK are continuing to work hard to improve the underlying performance of our UK business.”

He added the sale of the pipe and speciality businesses is “progressing” with interest from “several” bidders.