PremiumMumbai: Tata Steel on Wednesday posted a consolidated net profit of ₹7162 crore for the quarter ended March 2021, on account of higher income. This is against a loss of ₹1615 crore during the quarter ended March 2020.
Consolidated revenue from operations stood at ₹49,977 crore, up by 38.8% over ₹36,009 crore reported in the corresponding quarter of the last fiscal.
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Premium Premium A Bloomberg poll of 10 analysts had forecast a consolidated revenue of ₹461052.40 crores and profit of ₹7421.80 crore.
"The fourth quarter performance has been a standout in terms of both earnings and cash flows and helped the company to report one of the highest underlying performance for the full year in spite of the pandemic related disruptions during the first half of the financial year," said Koushik Chatterjee, Executive Director and CFO.
At the operating level, consolidated EBITDA (earnings before interest, tax, depreciation and amortization) jumped 196% year-on-year (YoY) to ₹14,290 crore against ₹4824 crore in the fourth quarter of last fiscal, driven by higher steel prices.
On Wednesday, Tata Steel's scrip closed at ₹1068.95 a share, up 0.46% on the BSE.
T V Narendran, CEO & Managing Director said, "Despite a slow start in the first quarter, we managed to deliver strong performance in India with broad-based, market-leading volume growth supported by our agile business model."
Narendran added that all segments, especially automotive, have performed extremely well and the company is making good progress on various initiatives to de-risk the business.
The company said work on its pellet plant and CRM complex at Kalinganagar is progressing well and it has also restarted its 5mtpa (metric tonnes per annum) expansion project which should be completed in FY24.
During the quarter, the company reduced its gross debt by over ₹20,000 crores and full-year de-leveraging was about ₹28,000 crores, resulting in a 28% drop in net debt at ₹75,389 crores.
"In the current financial year, we will reduce the debt levels by more than a billion dollars and also enhance the capital allocation to our strategic capex program in India to complete the 5mtpa expansion in Kalinganagar," added Chatterjee.
On its international business, the company said separation of UK and Netherlands businesses is an ongoing process and it is not looking at embarking on any strategic action in Netherlands or Europe at this time. "Our focus is on the separation and post that the transformation," said Narendran on a call post the earnings announcement.
Its Southeast Asia business, it said is getting it a better performance and valuation so it is currently focussing on running it as it is against an earlier plan of selling the units.
"Given the current situation and the cyclical upcycle from a market point of view and over the last year we did some work on the fundamentals of the business, so we felt we will pursue that option first and thus it is continuing operations," said Chatterjee.
The company's Southeast Asian businesses include NatSteel Singapore, NatSteel Vietnam, and Millennium Steel Thailand which it had planned to sell in 2019.
The company's shareholders have approved the merger of Tata Steel BSL with Tata Steel and a scheme petition has been filed with the NCLT to sanction the scheme with effect from 1st April 2019. The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products in also underway, it said.
The board has recommended a dividend of ₹25 per share.
The company which is producing 700 tonnes of liquid medical oxygen currently, is increasing the same to 1000 tonnes, but does not see an impact on steel production due to this.
"Steel production will get affected to some extent as some liquid oxygen is going for other purposes. We use liquid oxygen when there are production peaks, but we don't have that opportunity today. Many of our customers are also struggling as we don't have liquid oxygen for industrial purposes but from our point of view, I don't see the production impact of more than 3-5%," said Narendran.
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