Tata Steel on Monday posted a consolidated net loss of Rs 2,223.84 crore for the third quarter ended December 31, 2022, impacted by multiple factors, including rise in energy prices, and drop in realisations and prices in Europe. The steel major had posted a net profit of Rs 9,572.67 crore a year ago. The Tata group firm’s consolidated total revenue from operations fell to Rs 57,083.56 crore from Rs 60,783.11 crore a year ago.
The consolidated Ebitda fell to Rs 4,154 crore from Rs 15,853 a year ago. A consensus estimate of Bloomberg analysts was expecting a consolidated net profit of Rs 1,699.10 crore (10 brokers) on revenues of Rs 56,689.90 crore (13 brokers) and Ebitda of Rs 5,958.80 crore (13 brokers) for the quarter.“Our deliveries in Europe were lower during the nine months of FY23 due to slowdown in demand. Recession concerns weighed on steel prices, which coupled with elevated energy costs affected our performance.
Looking ahead, there is a visible pick up in steel prices across key regions on improved China demand outlook and sustained spending on infrastructure in India,” TV Narendran, CEO & MD, Tata Steel, said.“Tata Steel has delivered a steady growth in India volumes despite the volatile operating environment. Domestic deliveries stood at around 13.7 million tonne in the first nine months of the financial year and were up 4% on y-o-y. Broad-based growth was witnessed across most segments. For the quarter, domestic deliveries were up 11% y-o-y and grew at a faster pace than India apparent steel consumption aiding in retaining market leadership position across chosen segments,” he added.
The company spent Rs 3,632 crore on capex during the quarter. At Kalinganagar, phased commissioning of 6 mtpa pellet plant has begun, while work on 2.2 mtpa cold roll mill complex and 5 mtpa expansion is ongoing. In Punjab, work has started for a 0.75 mtpa electric arc furnace, the company said in a statement.
The Tata group firm’s net debt stood at Rs 71,706 crore, with net debt to Ebitda at 1.76 times and net debt to equity at 0.65 times.“In India, steel prices were subdued even as raw material costs moved lower. While this increased margins at standalone operations from around 16% in Q2 to about 18% in Q3, European operations witnessed margin compression due to lower realisations and elevated input costs. Free cash flow generated in Q3 stood at Rs 1,588 crore largely due to favourable movement in working capital,” Koushik Chatterjee, ED & CFO, said.
The British Steel Pension Scheme Tata Steel UK as Sponsor has completed a substantial part of its de-risking journey with about 60% of its liabilities insured. The buy-in transaction along with actuarial movements has resulted in a non-cash deferred tax expense of Rs 1,783 crore and increased the overall deferred tax expense for the quarter to Rs 2,150 crore.