Tata Steel has reported 22 per cent increase in consolidated net profit at ₹1,529 crore (₹1,254 crore) largely due to one-time write back of provision in overseas operations and ₹2,808 crore from sale of non-core assets in India.
Net sales were down 18 per cent to ₹29,069 crore (₹35,508 crore) due to lower production and drop in realisations. Steel production was down at 6.33 million tonnes (6.50 mt) due to shut down of few units in Jamshedpur and lower production in Europe. Earnings before interest, tax, depreciation and amortisation more than halved in the September quarter to ₹1,985 crore (₹3,997 crore) as steel prices dropped sharply.
Speaking to media on Thursday, TV Narendran, Managing Director, said subdued manufacturing activity led to steel demand fall by five per cent over the previous quarter with imports eating into domestic demand. The safeguard duty imposed in September had minimal impact as the steel prices plunged sharply. This apart, he said, rupee has been more stable against dollar than other currencies of competing countries. The company has one-time credit of ₹9,683 crore due to change in calculation of retirement benefits in Britain and the Netherlands. In India, the company made a provision of ₹1,322 crore for various reasons, including government claim of ₹880 crore, ₹293 crore towards voluntary retirement benefit for 800 employees and ₹125 crore for impairment of asset in the proposed Chhattisgarh project and closure of Malda manganese mines. It has also provided ₹302 crore for restructuring operations in South Africa.
The company has incurred an impairment loss of ₹7,772 crore in UK Strips business, specialty and bar mill and other units in Europe. The company prepaid debt of ₹2,900 crore during the quarter and had a net debt of ₹73,000 crore. It has no repayment schedule for the next six years as it has refinanced most of the loan last year.
On a standalone basis, the company's net profit was up two per cent at ₹2,523 crore (₹2,476 crore), while sales were down 11 per cent at ₹9,446 crore (₹10,705 crore).