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Tata Steel announced Q3FY24 results:
- Consolidated Revenue: For 9MFY24, the consolidated revenues stood at Rs 1,70,483 crore.
- EBITDA: The Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the same period was reported at Rs 16,771 crore, with a margin of approximately 10%.
- Quarterly Revenue: The revenues for Q3FY24 were at Rs 55,312 crore.
- EBITDA for the Quarter: EBITDA saw an increase of 47% QOQ (quarter over quarter) to Rs 6,334 crore, and the EBITDA margin was at 11%.
- Capital Expenditure: The company spent Rs 4,715 crore on capital expenditure during the quarter and a total of Rs 13,357 crore for the 9MFY24.
- Net Debt: Stood at Rs 77,405 crore.
- Liquidity: The group's liquidity remains strong at Rs 23,349 crore, including cash and cash equivalents of Rs 10,825 crore.
- India Revenues and Production: India’s revenues were Rs 35,011 crore and stable on a QoQ basis. Crude steel production was around 5.35 million tons, up 7% both QoQ and YoY (year over year).
- India Deliveries and EBITDA: Deliveries at 4.88 million tons were marginally higher QoQ, driven by a rise in domestic deliveries. EBITDA for India was Rs 8,302 crore, translating into an EBITDA margin of 24%.
- Kalinganagar Expansion: The commencement of the 5 MTPA (million tons per annum) expansion at Kalinganagar has begun.
- UK Performance: Revenue was £603 million with an EBITDA loss of £159 million. Liquid steel production was 0.72 million tons, and deliveries stood at 0.64 million tons.
- Netherlands Performance: Revenue was £1,239 million with an EBITDA loss of £117 million. Liquid steel production was stable at 1.19 million tons, and deliveries were up 5% QoQ.
T V Narendran, Chief Executive Officer & Managing Director: “The global operating environment has been complex, with the economic slowdown in China and geopolitics weighing on commodity prices in general. During this quarter, China has exported between 7 to 8 million tons of steel every month, which is the highest since 2015 and this has adversely impacted global steel prices as well as profitability. Despite this context, Tata Steel India has delivered better margins aided by higher deliveries as well as realizations on a QoQ basis. Our domestic deliveries for the quarter stood at 4.78 million tons and were up 3% QoQ and 10% YoY. Among the key segments, Automotive and well-established brands such as Tata Tiscon, Tata Steelium, and Tata Astrum had the best 3Q sales. The consistent growth in India deliveries has been aided by crude steel production being close to 5 million tons across the quarters in this financial year. The phased commissioning of our 5 MTPA capacity expansion at Kalinganagar is underway. Moving to Europe, our deliveries in the Netherlands were up while the UK moved lower QoQ due to subdued demand as well as operational issues given the aging assets. We will commence statutory consultations with the unions in the UK as a step towards our transition to an EAF-based sustainable business. We continue to undertake multiple initiatives across geographies to progress on our sustainability journey. I am happy to share that the Tata Steel Meramandali and Tata Steel Kalinganagar sites have now received ResponsibleSteelTM certification and we now have three certified sites in India including Jamshedpur.
Koushik Chatterjee, Executive Director, and Chief Financial Officer: “Tata Steel Consolidated revenues for the quarter stood at Rs 55,312 crore and EBITDA was Rs 6,334 crore, an increase in margins by around 300 bps QoQ. India's EBITDA was Rs 8,302 crore, a QoQ margin increase of 400 bps while subdued demand dynamics weighed on margins in the UK and Netherlands. The UK business continues to face production shortfalls arising from the end-of-life condition of several of its heavy-end assets. In the Netherlands, we expect BF#6 to restart by the end of January. Cash flow from operations in India rose sharply to Rs 9,016 crore while consolidated cash flow from operations was lower at Rs 7,879 crore. Our Net debt stands at Rs 77,405 crore and the group liquidity position remains strong at Rs 23,349 crore. Moving to strategic initiatives, we have largely fulfilled our plan to simplify our India footprint, having now completed the merger of Tinplate Company of India and Tata Metaliks into Tata Steel. Our announcement on 19th January about Tata Steel UK follows detailed discussions with and careful consideration of the alternative proposal from the representative body of the UK trade unions and their advisor. The company’s analysis shows that partial continuity of blast furnaces until completion of transition to the EAF is not affordable and engineering studies have found that building the EAF in an already operating steel melt shop is not feasible. Tata Steel is acutely aware of the impact of its proposal to wind down the heavy end in Port Talbot on individuals and the local community associated with our steel works, we will meaningfully consult with our employees and work to provide them with a fair, dignified, and considerate outcome. Tata Steel proposes to commit more than £130 million to a comprehensive support package for affected employees. This is in addition to the £100 million funding for the Transition Board set up by the company along with the UK and Welsh governments. Tata Steel has begun engineering design work on the EAF and discussions with National Grid for supporting infrastructure with a target to commission the EAF by 2027.”
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