Tata Steel Q4 net profit falls 65% to Rs555 crore

Total income declined to Rs58,863.22 crore from Rs63,131.08 crore in the January-March period of FY23

New Delhi: Tata Steel on Wednesday reported a 64.59 per cent decline in its consolidated net profit to Rs554.56 crore for the January-March quarter of 2023-24 on lower realisations and certain exceptional items.

The steel major had posted a profit of Rs1,566.24 crore in the year-ago period.

Total income of the company declined to Rs58,863.22 crore in the quarter from Rs63,131.08 crore in the January-March period of FY23. Expenses dropped to Rs56,496.88 crore in the period against Rs59,918.15 crore a year ago.

Its revenues decreased by 6 per cent due to lower realisations but were partly offset by higher volumes in India.

The company said exceptional items were primarily related to impairment of heavy end assets and restructuring cost relating to the UK business.

The board of the company has recommended a dividend of Rs3.60 per equity share of face value Re 1 each for FY24.

The board has also approved the issuance of additional debt securities, in one or more tranches, to raise up to Rs3,000 crore via non convertible debentures (NCDs) on private placement basis.

The board also gave its go-ahead to the proposal to infuse funds of up to $2.11 billion (Rs17,407.50 crore), by way of subscription to equity shares of T Steel Holdings Pte. Ltd (TSHP), wholly owned foreign subsidiary of the company, in one or more tranches, during FY25.

The funds will be utilised towards repayment of external debt in Tata Steel’s offshore subsidiaries and to support the restructuring cost in Tata Steel UK Limited, wholly owned subsidiary of Tata Steel Ltd.

It further “approved the proposal to convert debt instruments aggregating to $565 million (Rs4,661.25 crore) held by the company in TSHP into equity shares, during FY2024-25,” the company said.

The company will continue to hold these converted equity shares.

The company’s net debt stands at Rs77,550 crore.

The group liquidity remains strong at Rs31,767 crore, which includes cash & cash equivalents of Rs9,532 crore.

The company has spent Rs4,850 crore on capital expenditure during the March quarter and Rs18,207 crore for the full financial year.

Among global operations, Tata Steel UK annual revenues were 2,706 million pounds and EBITDA loss stood at 364 million pounds. Liquid steel production was 2.99 million tonnes while deliveries stood at 2.80 million tonnes. For the quarter, revenues were 647 million pounds and EBITDA loss stood at 34 million pounds.

Following seven months of formal and informal national level discussions with the UK trade unions, Tata Steel will commence closure of heavy end assets in June and proceed with its plan to invest in Electric Arc Furnace at Port Talbot.

Tata Steel Netherlands’ annual revenues were 5,276 million pounds and EBITDA loss stood at 368 million pounds, largely due to the reline of BF6 which was completed in early February. Liquid steel production was 4.81 million tonnes and deliveries were 5.33 million tonnes. For the quarter, revenues were 1,324 million pounds and EBITDA loss was at 27 million pounds.

T V Narendran, its Chief Executive Officer & Managing Director, said, “Our domestic deliveries were best ever at around 19 million tonnes and were up 9 per cent Year-on-Year (YoY) with broad based improvement across chosen market segments.

“Automotive volumes were aided by higher deliveries of hot-rolled and cold-rolled steel to auto OEMs (original equipment manufacturers) while our well-established retail brand Tata Tiscon crossed 2 million tonnes on an annual basis.

Overall, India deliveries now make up 68 per cent of total deliveries and will continue to grow with incremental volumes from 5 MTPA capacity expansion at Kalinganagar,” he said.

With respect to the UK operations, the company has decided to proceed with the proposed restructuring of heavy end UK assets and transition to greener steelmaking after due consideration of all the options over the last 7 months in consultation with union representatives, he added.