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Tata Steel Reports Q1 Results

Steel News - Published on Fri, 14 Aug 2020

Image Source: Tata Steel
Tata Steel CEO & Managing Director Mr TV Narendran said “During the quarter, we recalibrated our operations and our sales across geographies in line with underlying regulatory and market conditions. While this had an adverse impact on our volumes and our margins, we were successful in mitigating the impact as we pivoted the business towards export markets and successfully generated free cashflows despite adverse market conditions. Economic activity is gradually recovering. In India, we have ramped-up our capacity utilizations to 90% levels with total sales in June exceeding FY20 average monthly sales. We are further ramping up capacity utilization and increasing domestic sales which will lead to an improvement in our margins in coming quarters. In Europe, spreads are at unsustainably low levels but are expected to improve going forward. We are also engaged with respective governments in UK and Netherlands for their support. While the risk of further COVID-19 outbreaks remains, we are cautiously optimistic that the worst is behind us. We continued to remain extremely focused on cashflows and liquidity management through this crisis.”

Tata Steel India and its key subsidiaries have successfully countered the closure of the domestic market during the lockdown period by leveraging its global network and exporting more than 1.46 million tons during the quarter. This also limited the decline in our India steel deliveries to 27% QoQ as compared to the 55% QoQ drop in overall India steel demand.

Tata Steel’s operating level has recovered to 90% by end June 2020 and has since then increased further to 95%, catering to both domestic and export customers. With the improvement in the domestic market, Tata Steel has been reducing its exports ratio. The price outlook in both export and domestic market continues to improve on month on month basis and the current quarter demand has been much better than a typically slow monsoon quarter in the past.

India average steel realizations were lower due to the COVID impact during the quarter and about INR 2,000 crores of costs were under absorbed due to the lower volumes and have been charged to the profit and loss account. Despite the drop in margins, there was a reduction in net debt of INR 1,677 crores in India, including a reduction of INR 577 crores and INR 291 crores, respectively at Tata Steel BSL and Tata Steel Long Products.

Tata Steel Europe performance was affected with the overall weakness in economic activities in Europe and sharp drop in spreads. The company did receive short support from the UK and Netherlands Government including cash flow deferrals of payables.

Tata Steel India
HeadingQ1'21Q4'20QoQQ1'20YoY
Production (mn ton)2.994.73-37%4.5-34%
Deliveries (mn ton)2.934.03-27%3.96-26%
Turnover12,68919,493-35%21,129-40%
EBITDA1,4554,568-68%4,938-71%
Adjusted EBITDA1,4554,568-68%5,117-72%
Adjusted EBITDA (Rs. Per ton)4,96911,339-56%12,908-62%
Exceptional Items2,059-2,144-196%1020490%
PAT from Continuing Operations411-563-173%1,570-74%
 


Tata Steel Consolidated
HeadingQ1'21Q4'20QoQQ1'20YoY
Production (mn ton)35.147.37-30%7.15-28%
Deliveries (mn ton)4.936.5-24%6.34-22%
Turnover24,28933,770-28%35,947-32%
EBITDA5974,669-87%5,515-89%
Adjusted EBITDA1,0384,869-79%5,530-81%
Adjusted EBITDA (Rs. Per ton)2,1037,491-72%8,724-76%
Exceptional Items58-3,406-102%16263%
PAT from Continuing Operations-4,609-1,236273%695-763%
 

Source :

Posted By : Yogender Pancholi on Fri, 14 Aug 2020
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