Tata Steel reports consolidated revenues of Rs 59,490 cr for Q1 FY 2023-24
Mumbai: Tata Steel today announced its financial results for the quarter ended June 30, 2023. The Company reported consolidated revenues of INR 59,490 crores for the quarter. The EBITDA for the same period stood at INR 6,122 crores, with an EBITDA margin of 10%.
Consolidated Profit after Tax (PAT) was Rs 525 crores. Profitability was affected by a non-cash deferred tax charge due to the buy-in transaction at the British Steel Pension Scheme (BSPS). However, the successful completion of the insurance buy-in of BSPS has effectively derisked Tata Steel UK.
In India, the revenues were Rs 34,901 crores, and EBITDA reached Rs 7,514 crores.
T. V. Narendran, Chief Executive Officer & Managing Director, said: “During the quarter, global economic recovery continued to face headwinds affecting commodity prices including steel. In India, domestic steel demand continued to grow and was up around 10% on YoY basis but steel spot prices moderated in line with global cues. Tata Steel delivered steady performance, with India crude steel production of around 5 million tons. Domestic deliveries were up >20% and grew at a faster pace than India’s apparent steel consumption. We saw strong growth in key segments such as Branded Products & Retail and Industrial Products & Projects. which grew by 37% and 24% respectively, on YoY basis. Our retail sales majorly to individual home builders crossed 3 million tons in the last 12 months and we now service 8,000+ out of ~19,100 pin codes in India.”
During the quarter, Tata Steel spent Rs 4,089 crores on capital expenditure, making progress on the 5 MnTPA expansion at Kalinganagar and the EAF mill of 0.75 MnTPA in Punjab.
In India, the Crude steel production at around 5 million tons saw a 2% YoY increase, primarily driven by the ramp-up at Neelachal Ispat Nigam Limited. Deliveries at 4.8 million tons were higher by 18% YoY, driven by a rise in domestic deliveries. Broad based improvement was witnessed across key end use segments.
“I am happy to share that Neelachal Ispat Nigam Limited has begun to stabilise and is operating close to rated capacity within just 9 months of acquisition. The 5 MTPA expansion at Kalinganagar is underway with facilities getting commissioned in a phased manner. This is an important milestone in our journey to grow to 40 million tons and will aid in further consolidating our market position in India. We continue to progress on our sustainability journey and multiple initiatives are underway, calibrated to each operating location. In Netherlands, we are pursuing Roadmap+ program to bring about a significant reduction in emissions, dust, odour and noise. We are also engaged in discussions with technology providers and the government for transitioning to greener steel,” Narendran added.
In Europe, the planned relining of BF6 at Tata Steel Netherlands commenced in April and this has led to drop in crude steel production.
Koushik Chatterjee, Executive Director and Chief Financial Officer, said: “Despite a moderation in global steel spreads, our margin was broadly stable at around 10%. India business generated higher margin of around 22% and EBITDA stood at Rs 7,514 crores. In Europe, margins were broadly similar on QoQ basis as rise in revenue per ton was offset by lower volumes and elevated input costs. In UK, the buy-in transaction for the residual liabilities of British Steel Pension Scheme has been completed, successfully derisking Tata Steel UK. Volatility in steel markets have impacted working capital and cash flows but we continue to commit to growth in India and spent Rs 4,089 crores on capital expenditure during the quarter. This has led to a Net debt of Rs 71,397 crores. Group liquidity position remains strong at Rs 30,569 crores, which includes Rs 19,043 crores of cash and cash equivalents. We remain focused on cost optimisation, operational improvements and working capital management to maximise cashflows. Sustainability is at the core of our strategy which includes providing comprehensive disclosures. We recently published our first Business Responsibility and Sustainability Report and are actively involved in the development of global and national standards with respect to sustainability disclosures.”
Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of Tata Steel considered and unanimously approved the re-appointment of T. V. Narendran as the Chief Executive Officer and Managing Director of the Company for a further period of five years effective September 19, 2023 through September 18, 2028, not liable to retire by rotation. The re-appointment is subject to approval of the shareholders of the Company. T. V. Narendran’s present tenure as CEO & MD will conclude on September 18, 2023.