Tata Steel has reported that its net profit in the June quarter plunged to ₹525 crore against ₹7,714 crore logged in the same period last year on the back of lower production and a drop in realisations.

Revenue was down 6 per cent at ₹59,490 crore (₹63,430 crore). Expenses increased to ₹58,553 crore (₹51,912 crore).

Consolidated EBITDA was down at ₹6,122 crore (₹15,047 crore), while per tonne EBITDA dipped to ₹8,503 crore (₹22,717 crore).

Steel production was down at 7.13 million tonne (7.74 mt), while sales volume increased to 7.20 mt (6.62 mt).

‘Global headwinds’

TV Narendran, Managing Director, Tata Steel, said the global economic recovery continued to face headwinds affecting commodity prices, including steel.

In India, domestic steel demand continued to grow and was up about 10 per cent on a year-on-year basis, but steel spot prices moderated in line with global cues, he added.

Neelachal Ispat Nigam production has begun to stabilise and is operating close to rated capacity after 9 months of acquisition. The 5 MTPA expansion at Kalinga Nagar is underway, with facilities getting commissioned in a phased manner, he said.

In the Netherlands, he said the company is engaged in discussions with technology providers and the government about transitioning to greener steel.

Volatility in steel markets has impacted working capital and cash flows, but the company spent ₹4,089 crore on capital expenditure during the quarter.

Gross debt increased to ₹90,440 crore (₹84,893 crore), while net debt was at ₹71,397 crore.

The group’s liquidity position remains strong at ₹30,569 crore, which includes ₹19,043 crore of cash and its equivalents.

Net profit down

On a standalone basis, the company’s net profit was down at ₹4,271 crore (₹6,114 crore), while revenue was up marginally at ₹32,342 crore (₹32,021 crore).

Production was down 2 per cent at 4.65 million tonne (4.73 mt), while sales increased to 4.62 mt (3.89 mt).

EBITDA was down at ₹7,514 crore (₹9,582 crore), while EBITDA per tonne dropped to ₹15,651 (₹23,557) in the quarter under review.

Revenue from European operation was down at ₹21,335 crore (₹25,961 crore), while it recorded an EBITDA loss of ₹1,569 crore against positive Ebitda of Rs 6,037 crore. Ebitda loss per tonne was ₹7,890 against ₹28,220 logged last year.

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