 "Tata Steel returns to profit in Q3, posts PAT of Rs 513 cr, revenue dips 3%")
Tata Steel on Wednesday reported a consolidated net profit of Rs 513.37 crore for the quarter ended December on the back of a strong showing by Indian operations. In the year-ago period, the company had posted a net loss of Rs 2,223.84 crore.
Revenue from operations at Rs 55,311.88 crore was down by 3.10 per cent year on year (Y-o-Y). A Bloomberg consensus estimate had pegged revenues at Rs 57,810.7 crore and adjusted net income at Rs 1,687.8 crore.
In the previous quarter, Tata Steel’s recorded revenue of Rs 55,682 crore and net loss of Rs 6,196.24 crore.
T V Narendran, chief executive officer & managing director, Tata Steel said that the global operating environment has been complex, with economic slowdown in China and geopolitics weighing on commodity prices in general.
“During this quarter, China has exported between 7 to 8 million tonnes of steel every month, which is the highest since 2015 and this has adversely impacted global steel prices, as well as profitability,” he said.
Despite this, Narendran said, Tata Steel India delivered better margins aided by higher deliveries and realisations on a quarter on quarter (Q-o-Q) basis. Domestic deliveries for the quarter stood at 4.78 million tonnes, up 3 per cent Q-o-Q and 10 per cent Y-o-Y.
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The India performance, aided by improved volumes and realisations, reflected in the standalone numbers. On a standalone basis, Tata Steel’s net profit stood at Rs 4,653.04 crore and revenue at Rs 34,681.90 crore. But lower realisations weighed on European operations. UK revenues were at Rs 6,294 crore and Ebitda loss stood at Rs 1,657 crore. The Netherlands revenues were at Rs 12,923 crore and Ebitda loss at Rs 1,215 crore.
Koushik Chatterjee, executive director and chief financial officer, said, India Ebitda was Rs 8,302 crores, a Q-o-Q margin increase of 400 bps while subdued demand dynamics weighed on margins in UK and The Netherlands.
“The UK business continues to face production shortfalls arising from the end-of-life condition of several of its heavy end assets. In the Netherlands, we expect BF#6 to restart by the end of January,” Chatterjee said.
Liquid steel production in the Netherlands was lower Y-o-Y due to relining of one of the blast furnaces. On January 19, Tata Steel confirmed the closure of blast furnaces at Port Talbot UK, as part of a transition to electronic arc furnace technology – a move potentially impacting 2,800 jobs. The company would commence statutory consultations with the unions in the UK.
Chatterjee said, “Tata Steel is acutely aware of the impact of its proposal to wind down the heavy end in Port Talbot on individuals and the local community associated with our steel works, we will meaningfully consult with our employees and work to provide them with a fair, dignified and considerate outcome.”
In India, the phased commissioning of the 5 MTPA expansion at Kalinganagar has commenced, the company said. The company has spent Rs 4,715 crores on capital expenditure during the quarter and Rs 13,357 crores for 9MFY24. Net debt of the company stood at Rs 77,405 crore at the end of December.