TATA STEEL RE­PORTS Q4 LOSS OF ~1,499 CRORE

Business Standard - - FRONT PAGE - ADITI DIVEKAR

Tata Steel, the country’s old­est steel pro­ducer, re­ported a con­sol­i­dated loss be­fore tax of ~1,499.45 crore in the March quar­ter, as against a profit of ~4,252.50 crore in the cor­re­spond­ing pe­riod last year on the back of weak rev­enue and a slew of ex­cep­tional items, which fur­ther dented the earn­ings of the com­pany. In Q4 of FY20, the com­pany’s top line stood at ~32,866 crore, down 20 per cent from the same pe­riod last year, as weak de­mand im­pacted do­mes­tic as well as over­seas op­er­a­tions.

Tata Steel re­ported a con­sol­i­dated pre­tax loss of ~1,499.45 crore in the quar­ter ended March 31, 2020, against a profit be­fore tax of ~4,252.50 crore in the cor­re­spond­ing pe­riod last year. This was on the back of weak rev­enue and a slew of ex­cep­tional items, which fur­ther dented earn­ings of the com­pany.

In the fi­nal quar­ter of FY20, the com­pany’s top line stood at ~32,866 crore, down 20 per cent from same pe­riod last year. This is be­cause weak de­mand amid the slow­ing eco­nomic growth im­pacted do­mes­tic as well as over­seas op­er­a­tions.

“While de­liv­er­ies in In­dia were marred by the na­tion­wide lock­down in late March, mar­gins im­proved on the back of stronger per­for­mance in the early part of the quar­ter. Tata Steel Europe showed a turn­around in per­for­mance with pos­i­tive Ebitda for the quar­ter,” said T V Naren­dran, chief ex­ec­u­tive of­fi­cer (CEO) and man­ag­ing di­rec­tor (MD), at the earn­ings con­fer­ence on Mon­day. Along­side, a slew of ex­cep­tional items (most of which were losses) com­pris­ing im­pair­ments, em­ployee sep­a­ra­tion com­pen­sa­tion and restruc­tur­ing, among oth­ers, led to a loss of ~3,405.85 crore.

In­dia op­er­a­tions con­trib­uted ~2,009 crore to the total loss re­ported un­der the ex­cep­tional items cat­e­gory. The sin­gle earn­ings item within the ex­cep­tional items cat­e­gory was profit on sale of sub­sidiaries and non-cur­rent in­vest­ment, which was a mea­gre ~40.63 crore. In the pe­riod un­der re­view, the com­pany re­ported a con­sol­i­dated net loss at ~1,615.35 crore against a net profit of ~2,295.25 crore in the same pe­riod last year.

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

The Cen­tre im­posed a strin­gent na­tion­wide lock­down with ef­fect from March 25, se­verely im­pact­ing man­u­fac­tur­ing ac­tiv­i­ties. Steel and min­ing were ex­empt from the lock­down mea­sures, al­beit sub­ject to cer­tain guide­lines. How­ever, steel de­mand was af­fected. This is be­cause key steel con­sum­ing sec­tors strug­gled to op­er­ate amid the weak­en­ing eco­nomic ac­tiv­i­ties, work­ing cap­i­tal con­straints, short­age of man­power and lo­gis­ti­cal is­sues. The stand­alone loss be­fore tax stood at ~96 crore in the March quar­ter against a profit of ~3,865 crore in the cor­re­spond­ing pe­riod last year.

The net loss at In­dia op­er­a­tions widened fur­ther to ~437 crore as tax ex­penses worth ~341 crore dragged the bot­tom line. The com­pany’s net profit in same pe­riod last year stood at ~2,491 crore.

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