Tata Steel reports profit after five quarters; elects Chandrasekaran as Chairman
The company said that the revenues rose mainly on the back of strong performance of Indian operations.
- Consolidated revenues up by 7% sequentially and by 14% Year-on-Year (YoY). The growth is largely driven by strong performance from Indian Operations.
- Consolidated EBITDA at Rs. 3,550 crore. EBITDA margin improves by 120 bps sequentially.
- Profit after Tax at Rs. 232 crore. Higher by Rs 281 crore sequentially and by Rs. 2,980 crore YoY.
- Elected N Chandrasekaran as the Chairman of the Board.
Tata Steel on Tuesday announced financial result for the quarter ended on December 31. The company reported a consolidated net profit of Rs 231.9 crore as compared to the net loss of Rs 2747.7 crore during the same period last year. The company has slipped into profit for the first time in five quarters.
Total income of Tata Steel increased from Rs 25865.2 crore in Q3FY16 to Rs 29521.6 crore in Q3FY17.
Consolidated EBITDA stood at Rs 3550 crore and the EBITDA margin improved by 120 basis points on sequential basis.
The company said that the revenues rose mainly on the back of strong performance of Indian operations. The deliveries grew by 14% sequentially and 27% YoY, outperforming the domestic markets which grew by 3% sequentially and contracted by 2% YoY, the company said in a regulatory filing.
Gross debt remained stable at Rs. 84,752 crore as on December 31, 2016. Net debt was Rs.76,680 crore.
Commenting on the company's performance, T V Narendran, Managing Director, Tata Steel India and South East Asia, said, “Tata Steel recorded strong sales this quarter as the strength of our franchise helped us counter headwinds due to demonetisation. While the broader market was affected by lower rural sales and adverse consumer sentiments, we were able to increase overall volumes by 14% sequentially and register strong growth across all our target customer segments."
On the European front, the liquid steel production of 2.68 million tonnes was about flat on sequential basis, but 4% lower than Q3 FY16. Deliveries of 2.37 million tonnes were 3% higher sequentially, but 13% lower YoY following the strategic decision to focus on higher-value added products in UK, the company said.
EBITDA for the quarter improved to Rs. 610 crore, compared with a loss of Rs. 757 crore a year earlier as a result of a more competitive Pound, a lower UK cost base and more favorable market conditions, the company said.
Hans Fischer, MD & CEO of Tata Steel in Europe, said: “Our European strategy continues to be focused on developing differentiated products and services which improve our customers’ competitiveness. Sales of differentiated products were +13% higher and their value-add almost 30% higher than a year ago, with stronger sales in the automotive and construction sectors."
Moreover, the company elected N Chandrasekaran as the Chairman of the Board. Speaking on the occasion, Chandrasekaran said, "Tata Steel is an iconic company that has stood tall for over a century. I feel greatly honoured to be chosen as the Chairman and I accept this responsibility with a deep sense of humility."