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Tata Steel posts Q4 loss at Rs 1,096 crore, operating earnings beat estimates

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at Rs 4,646.9 crore against an estimate of Rs 3,990 crore

June 29, 2020 / 08:20 PM IST
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Steel maker Tata Steel on June 29 has posted a consolidated net loss at Rs 1,095.7 crore for the quarter-ended March 31, which was less than the average of estimates of analysts polled by CNBC-TV18 at Rs 1,300 crore. It had reported a profit of Rs 2,430.9 crore in the same period last year.

Consolidated revenue from operations, which was largely in line with estimates, declined 20.4 percent year-on-year to Rs 33,770 crore for the quarter impacted by the worldwide lockdown.

"The COVID-19 outbreak has led to an unprecedented health crisis and disrupted economic activities and global trade while weighing on consumer sentiment. Consequently, global steel demand is expected to be sharply lower in 2020 before a meaningful recovery in 2021," Tata Steel said in a BSE filing.

Consolidated steel production for the quarter increased by 2.2 percent YoY to 7.37 million tonne, but deliveries were down 13.6 percent to 6.5 MT. India's steel production rose by 5.6 percent YoY to 4.73 MT, but deliveries fell 14.6 percent to 4.03 MT in Q4FY20, it added.

Operating performance declined but was ahead of analysts' estimates. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) fell 38.1 percent to Rs 4,646.9 crore and margin dropped 390 bps to 13.8 percent.


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As per estimates of a CNBC-TV18 poll, EBITDA was estimated at Rs 3,990 crore with margin at 11.8 percent.

The management said with the phased removal of the lockdown restrictions in India, upstream steel making operations have been ramped up and were currently operating around 80 percent utilisation levels.

"In Europe, Tata Steel Europe continues to operate around 70 percent utilisation levels. Key steel consuming sectors such as automotive and construction continue to be adversely affected, though demand for packaging material has seen a sharp upsurge," it added.

In FY20, the company reported a 73.6 percent decline in profit at Rs 2,719.58 crore and 11.3 percent fall in revenue at Rs 1,39,816.65 crore.

India steel production grew 8 percent YoY to 18.20 MT in FY20 with ramp up at Tata Steel BSL and acquisition of Usha Martin's steel business by Tata Steel Long Products, the management said, adding deliveries grew 4 percent YoY to 16.97 MT.

In Europe, liquid steel production marginally declined to 10.26 MT in FY20 and deliveries fell 4 percent to 9.29 MT due to overall weakness in economic activity.

TV Narendran, its CEO and Managing Director, said, "While there will be a sharp drop in volumes in Q1FY21, we are seeing early signs of recovery and remain poised to leverage our position on normalisation of business conditions."

The company has announced a dividend payment of Rs 10 per ordinary share and Rs 2.504 per partly paid ordinary share for FY20.
Moneycontrol News
first published: Jun 29, 2020 06:59 pm
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