Tata Steel April-June Net Profit More Than Doubles To ₹20.8 Billion

Tata Steel Ltd.'s consolidated net profit more than doubled on year to ₹20.8 billion in the April-June quarter, driven by cost optimisation and higher realisations, even as sales volumes declined. In the year-ago quarter, the company had posted a profit of ₹9.6 billion.

Consolidated revenue slipped 2.8% on year to ₹531.8 billion, mainly due to lower volumes. However, improved price realisations helped cushion the impact. Revenue from India dropped over 6% to ₹311.4 billion, while Europe revenue stayed flat at ₹195.9 billion.

Despite subdued demand in the UK, Tata Steel swung to a pre-tax profit of ₹1.4 billion in its European business from a loss of nearly ₹5 billion a year ago. UK revenue for the quarter was £536 million and EBITDA loss narrowed to £41 million from £80 million in the previous quarter. In the Netherlands, revenue stood at €1.52 billion and EBITDA rose to €64 million from €14 million. Liquid steel production there was 1.7 million tonnes, while deliveries totalled 1.5 million tonnes.

Consolidated sales volume declined 3.7% on year to 7.1 million tonnes, with India volumes also down 3.7% at 4.8 million tonnes. Production fell 8.4% to 7.3 million tonnes on year, due to maintenance shutdowns at the Jamshedpur plant and Neelachal Ispat Nigam Ltd. Output in India dipped 0.6% to 5.2 million tonnes.

Adjusted EBITDA per tonne rose 11.3% on year to ₹10,470, while reported EBITDA per tonne was up 13.7% at ₹10,503. Total adjusted EBITDA rose 7.3% to ₹74.6 billion, and reported EBITDA increased 9.6% to ₹74.8 billion. Operating EBITDA margin improved to 14.07% from 12.46% a year ago.

Raw material costs fell 12.7% to ₹180.3 billion, while purchase of stock-in-trade was down 9.3% at ₹39.5 billion. Overall, total expenses dropped 3.9% on year to ₹503.5 billion, despite higher employee costs, finance charges, and depreciation.
Capital expenditure during the quarter stood at ₹38.3 billion. Net debt was ₹848.4 billion as of June 30.