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Tata Steel Reports Results for Q4 & 2019-20

Steel News - Published on Tue, 30 Jun 2020

Image Source: Tata Steel
Tata Steel CEO & Managing Director Mr TV Narendran said “FY20 has been a challenging year. The Indian economy slowed down in the first half with key steel consuming sectors like automotive contracting sharply. While the economy began recovering in the second half, the outbreak of Covid-19 in end March led to unprecedented disruption and heightened economic uncertainty. We have recalibrated our operations in line with the evolving business environment and are focused on conserving cash while actively de-risking the business. While deliveries in India were marred by the nationwide lockdown in late March 2020, margins improved on the back of stronger performance in the early part of the quarter. Both our acquisitions, Tata Steel BSL and Tata Steel Long Products continue to deliver improvements in operating KPIs which has translated into better profitability. Tata Steel Europe showed a turnaround in performance with positive EBITDA for the quarter. While there will be a sharp drop in volumes in 1QFY21, we are seeing early signs of recovery and remain poised to leverage our position on normalization of business conditions. With the phased removal of the lockdown restrictions in India, our upstream steel making operations have been ramped up and are currently operating at about 80% utilization levels. Our downstream units have reopened and are steadily ramping up. There are early signs of a recovery in steel demand on the back of increased spending on infrastructure projects as well as rural demand. In Europe, Tata Steel Europe continues to operate at about 70% utilization level. Key steel consuming sectors such as automotive and construction sector continue to be adversely affected, though demand for packaging material has seen a sharp upsurge.”

Key Highlights

India steel production grew 8%YoY to 18.20 million tonnes in FY20 with ramp up at Tata Steel BSL and acquisition of Usha Martin’s steel business by Tata Steel Long Products. In 4QFY20, it grew by 6%QoQ to 4.73 million tonnes. India steel deliveries grew 4%YoY to 16.97 million tonnes in FY20 despite a 17%QoQ drop in 4QFY20 deliveries to 4.03 mn tons due to the nationwide lockdown in late Mar’20. Branded Products & Retail segment achieved an 8%YoY improvement in volumes to 5.32 million tonnes

Tata Steel BSL achieved best ever crude steel production and sales at 4.46 million tonnes and 4.14 million tonnes, respectively on the back of improved maintenance practices, higher capacity utilizations and marketing synergies.

Tata Steel Long Products which acquired steel making facility of Usha Martin during the year, achieved crude steel production of 0.58 million tonnes this year while deliveries stood at 0.51 million tonnes.

Tata Steel Jamshedpur has been able to achieve substantial improvement in water consumption with specific consumption rate improving to 2.80 m3/tcs in FY20 from 3.27 m3/tcs in FY19. Solid waste utilization increased at both Tata Steel Jamshedpur and Tata Steel Kalinganagar to 102% and 101.2%.

Key corporate developments:

Given the uncertain business environment, capex is being curtailed sharply and restricted to safety and sustenance projects. The capex plans will be revisited in H2 or when business conditions normalize.

Tata Steel Mining Limited, a wholly-owned subsidiary of Tata Steel, has signed 50 year leases for Kamarda and Saruabil Chromes mines. It has also won Sukinda Chrome ore mines in the auction and the lease grant process is underway. With these mines, Tata Steel Mining is well placed to cater to its global customer base as well as requirements of Tata Steel Group.

Tata Steel Europe closed its Orb Electrical Steels business in the UK. The company offered employees alternative opportunities where possible at other sites.

South East Asian operations continued to be classified as ‘Asset held for sale’. While Tata Steel continues to engage with the strategic players for its divestment, the outbreak of COVID-19 has delayed the process.

India1 (Standalone+TSBSL+TSLP)
(All figures in Rs. Crores unless specified)4QFY203QFY204QFY19FY20FY19YoY
Production (mn tons)34.734.474.4818.216.818.3%
Deliveries (mn tons)4.034.854.7216.9716.264.4%
Turnover19,49321,29924,90182,12589,979-8.7%
EBITDA4,5684,1105,76717,65023,934-26.3%
EBITDA (Rs. per ton)11,3398,48412,22810,40014,719-29.3%
PBT before exceptional items1,9231,4563,6287,26015,608-53.5%
Exceptional Charges-2,14434967-1,796-74-2327.0%
PAT from Continuing Operations-5631,1942,3095,6119,777-42.6%
 


Consolidated2
(All figures in Rs. Crores unless specified)4QFY203QFY204QFY19FY20FY19YoY
Production (mn tons)37.376.997.2128.4627.115.0%
Deliveries (mn tons)6.57.317.5226.6826.8-0.4%
Turnover33,77035,52042,424139,817157,669-11.3%
EBITDA4,6693,6597,76217,73529,770-40.4%
EBITDA (Rs. per ton)7,1835,00310,3256,64711,110-40.2%
PBT before exceptional items1,906-2164,2413,52016,027-78.0%
Exceptional Charges-3,406-32911-3,752-121-3000.8%
PAT from Continuing Operations-1,236-1,1662,3532,3379,187-74.6%
 


1. India includes Tata Steel Standalone Limited, Tata Steel BSL Limited (TSBSL) and Tata Steel Long Products Limited (TSLP) on proforma basis without inter-company eliminations; Tata Steel BSL financials are consolidated from 18th May, 2018.
2. Consolidated figures don’t include NatSteel Holding and Tata Steel Thailand as it is classified as ‘Asset held for sale’
3. Production numbers for consolidated financials are calculated using Crude steel for India and liquid steel for Europe

Source :

Posted By : Yogender Pancholi on Tue, 30 Jun 2020
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