New Delhi: Tata Steel reported a 60% decrease in net profit on Friday at ₹Rs 1,635 crore for the quarter ended September 30, 2020. The mill reported a net profit of ₹4,044 million rupees in the prior year period.
The India operations generated an EBITDA of ₹6,025 cr and Tata Steel’s independent EBITDA margin crossed 29% with an EBITDA / t of ₹13,127.
Consolidated operating income increased 7% to ₹37,154 crore vs ₹Rs 34,579 crore in September 2019. All major sites in India are operating close to full capacity utilization, the company said.
“Tata Steel has delivered strong results in India with market leading volume growth and strong cash flow generation. The resilience of our business model and the commitment of our teams has enabled us to increase capacity utilization. to normal levels and reach the highest levels in history. sales despite ongoing challenges due to the COVID pandemic. There has also been a significant improvement in the product mix towards domestic sales and higher value-added products and a sharp reduction in costs We are now embarking on the reorganization of our Indian subsidiaries into four verticals to drive scale, synergies and simplification that we are sure will create value for our stakeholders.
“In Europe, although the overall environment remains challenging and the recovery is more gradual, there has been an improvement in volumes and sales mix. We will continue to drive performance and work on a strategic resolution to ensure that the focus remains on the cash flows and We are continuing our discussions with the UK government regarding the future strategy of our UK business, “said TV Narendran, CEO and Managing Director of Tata Steel.
Meanwhile, Swedish steelmaker SSAB confirmed on Friday that it is in talks with Tata Steel Group about a possible acquisition of Dutch steelmaker IJmuiden from Tata Steel Europe and related subsequent assets.
“SSAB has participated in various discussions on consolidations in the European steel industry,” SSAB said in a statement. “Discussions with Tata are ongoing, but no decisions have been made.”
SSAB was reported to have been in talks with Tata and Germany’s Thyssenkrupp recently and Reuters reported last week that SSAB was interested in the IJmuiden plant in the Netherlands.
“There can be no certainty that any transaction will materialize, nor as to the terms of such potential transaction,” SSAB added in Friday’s statement.
“It is very encouraging to report that despite the pandemic, Tata Steel has had one of the best quarterly results in India in recent times. This was driven by a relentless focus on operating performance and a reduction in our cash costs by almost 14% on a quarterly basis. The India operations generated an EBITDA of ₹Rs 6,025 crore and Tata Steel Standalone’s EBITDA margin crossed 29% with an EBITDA / t of Rs 13,127.
“We continue to turn business decisions on cash while aggressively managing costs and being very disciplined with capex to ensure we move forward on our deleveraging journey. This quarter we reduced our consolidated net debt by ₹Rs 8,197 crore, which is now below March 2019 levels. We ended Q2 with a liquidity buffer of Rs 24,323 crore with approximately Rs 17,824 crore in cash and cash equivalents, coupled with a solid Internal generation gives us enough room for further deleveraging in the future. Based on the discussions, initiated by SSAB Sweden, regarding a possible acquisition of Tata Steel’s Dutch business, we will conduct due process and move on to the next stages, including consultation and due diligence.
“In India as well, we are moving towards the consolidation and corporate simplification process with today’s announcement of the merger of Tata Metaliks and Indian Steel and Wire products into Tata Steel Long Products,” said Koushik Chatterjee, CEO and Director. financial of Tata Steel. .
On Friday, Tata Steel’s NSE offering closed 3% higher at ₹487.50.
.
