Tata Steel posts fourth quarter profit of 7,162 crore, net debt down 28%

Consolidated operating revenue amounts to ??49,977 crore, up 38.8% from ??36,009 crore declared in the corresponding quarter of the last fiscal year.

A Bloomberg poll of 10 analysts predicted consolidated revenue of ??461 052.40 crores and profit from ??7,421.80 crore.

“The fourth quarter performance was exceptional in terms of earnings and cash flow and helped the company to post one of the strongest underlying performance for the full year despite the turmoil related to pandemic in the first half of the fiscal year, ”said Koushik Chatterjee, Executive Director and Chief Financial Officer.

At the operational level, consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) jumped 196% year-on-year (YoY) to ??14,290 crores against ??4824 crore in the fourth quarter of last year, due to rising steel prices.

Tata Steel’s script closed at ??1,068.95 per share, up 0.46% on BSE.

TV Narendran, CEO and Managing Director, said: “Despite a slow start in the first quarter, we managed to deliver a strong performance in India with large scale and market leading volume growth supported by our business model. agile. “

Narendran added that all segments, especially automotive, have performed extremely well and the company is making good progress on various initiatives to reduce business risk.

The company said that work on its pellet plant and CRM complex in Kalinganagar is progressing well and that it has also restarted its 5 mtpa (metric tons per year) expansion project which is expected to be completed during the year. exercise 24.

During the quarter, the company reduced its gross debt by more than ??20,000 crore and full-year deleveraging was around ??28,000 crores, resulting in a 28% drop in net debt to ??75,389 crores.

“In the current fiscal year, we will reduce debt levels by over $ 1 billion and also increase the capital allocation to our strategic investment program in India to complete the $ 5 million expansion. tonnes per year in Kalinganagar, ”added Chatterjee.

Regarding its international business, the company said that the separation of the UK and Netherlands activities is an ongoing process and that it does not currently consider any strategic action in the Netherlands or Europe. “We are focused on separation and transformation,” Narendran said on a call after the results were announced.

Its business in Southeast Asia, he said, allows it to achieve better performance and better valuation, so it is currently focused on its operation, unlike an earlier plan to sell the units.

“Given the current situation and the cyclical upside from a market perspective and over the last year, we have been working on the fundamentals of the business. .

The company’s activities in Southeast Asia include NatSteel Singapore, NatSteel Vietnam and Millennium Steel Thailand which it planned to sell in 2019.

The company’s shareholders have approved the merger of Tata Steel BSL with Tata Steel and a petition has been filed with the NCLT to sanction the program with effect from April 1, 2019. The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long products are also in the works, he said.

The board recommended a dividend of ??25 per share.

The company that currently produces 700 tonnes of liquid medical oxygen is increasing the same amount to 1,000 tonnes, but sees no impact on steel production because of it.

“Steel production will be affected to some extent as liquid oxygen is used for other purposes. We use liquid oxygen when there are peaks in production, but we don’t have that opportunity today. A lot of our customers are also struggling as we do ‘I don’t have liquid oxygen for industrial use but from our point of view I can’t see the production impact of more than 3-5% “Narendran said.

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Ann J. Cox