Tata Steel has reported a 70 per cent fall in its consolidated net profit at ₹337 crore for the June quarter against ₹1,139 crore in the year-ago period.
The company’s profitability was impacted by one-time charge of ₹262 crore due to write-down of assets and a huge increase in finance costs.
Net sales rose 11 per cent to ₹36,143 crore, from ₹32,559 crore a year earlier.
The company registered a profit of ₹1,270 crore on sale of an investment and an expense of ₹1,577 crore due to goodwill and write-down of assets in its joint venture with Rio Tinto Benga (Mauritius).
Finance costs rose 26 per cent to ₹1,252 crore. Tata Steel’s total tax liability more than doubled to ₹1,080 crore (₹351 crore).
The earnings before interest, tax, depreciation and amortisation (EBITDA) was higher by 15 per cent at ₹4,325 crore (₹3,755 crore). Earnings per share stood at ₹11.28 against ₹3.02.
On a standalone basis, the steelmaker’s net profit was up 67 per cent at ₹2,268 crore in the June quarter, compared with ₹1,356 crore a year ago, largely due to exceptional gains of ₹788 crore from the sale of a stake in Dhamra Port in Odisha.
Turnover increased 11 per cent to ₹10,468 crore (₹9,455 crore), driven by higher volumes and better realisation. EBITDA was up 13 per cent at ₹3,266 crore (₹2,897 crore).
The company produced 2.33 million tonnes (mt) of steel and sold 2.25 mt in the first quarter.
“We continue to increase deliveries to targeted segments in the domestic markets, with exports constituting barely 1 per cent of total sales in the June quarter,” said the company.
In Europe, the company’s turnover increased 12 per cent to ₹20,741 crore (₹18,432 crore) as deliveries rose 2 per cent to 3.2 mt (3.14 mt).
Ebitda was up by 28 per cent to ₹995 crore (₹777 crore), while the Ebitda margin rose 58 basis points.
The focus on costs resulted in a saving of £30 million (around ₹300 crore) in the quarter.
TV Narendran, Managing Director, Tata Steel, said the economic sentiment has improved and the Government’s thrust on development of core industries such as housing and infrastructure would boost steel demand in the coming quarters.
Karl-Ulrich Kohler, Managing Director, Tata Steel Europe, said despite market spreads tightening, financial performance improved slightly with the focus to reduce cost.
The company launched 10 new products and increased the proportion of differentiated sales by almost 20 per cent, he said.
On Wednesday, shares of the company closed 1.33 per cent down at ₹534.70 on BSE.
source: http://www.thehindubusinessline.com/