Tata Steel Ltd, India’s biggest steel company by market value, has reported a consolidated net profit of Rs 917 crore in the September quarter against a net loss of Rs 364 crore logged in the corresponding quarter last year.
The turnaround was driven by the ramp-up of production in India and improved performance at the European and South East Asian operations.
Consolidated turnover increased 7 per cent to Rs 36,645 crore from Rs 34,133 crore. Group EBITDA (earnings before interest, tax, depreciation and amortisation) moved up 54 per cent to Rs 3,784 crore from Rs 2,453 crore.
Deliveries in the quarter were at 6.48 million tonnes (mt) against 6.07 mt in the last corresponding quarter.
As of September 30, the steelmaker’s debt was at Rs 64,334 crore and it had Rs 12,779 crore in cash. Total liquidity, including un-drawn credit lines, was Rs 17,500 crore.
The major contribution to the improvement in production came from the recently commissioned plants in India. Deliveries in India increased 18 per cent to 2.04 mt during the September quarter (1.73 mt). Turnover jumped eight per cent to Rs 9,921 crore (Rs 9,151 crore), while Ebitda was higher at Rs 3,202 crore against Rs 2,669 crore. The operating margin increased to 32 per cent from 29 per cent.
Standalone numbers
On a standalone basis, the net profit was up 15 per cent at Rs 1,559 crore, while net sales improved nine per cent at Rs 9,826 crore.
T.V. Narendran, Managing Director, Tata Steel India and South East Asia, said overall market conditions weakened during the last quarter, exacerbated by heavy monsoons and the credit slowdown affecting customers.
Despite these difficult conditions, the rolling facilities at Jamshedpur, Jharkhand, ramped up to full capacity towards the end of the second quarter. The new project in Odisha continues to make good progress, though there have been some weather-related disruptions due to the Phailin cyclone and the subsequent floods.
In Europe, deliveries improved one per cent to 3.46 mt (3.42 mt), while production at 3.34 mt was higher by 16 per cent.
Turnover increased to Rs 21,149 crore (Rs 20,314 crore). Ebitda improved in Europe due to reopening of the Port Talbot blast furnace in the UK and from the continuing efforts to reduce costs.
Karl-Ulrich Köhler, MD, Tata Steel Europe, said the restart of the Port Talbot furnace resulted in stronger financial performance despite margins being squeezed in the September quarter.
Koushik Chatterjee, Group Executive Director (Finance and Corporate), said the group cash flows from operations for the quarter were strong due to focus on internal initiatives including working capital and spend management.
“Capital expenditure on the greenfield capacity in Odisha remains the key priority. We have spent about Rs 4,500 crore in the first half on this project,” he said.