Tata Steel reports ₹1,229 cr Q3 net loss on lower steel prices
nMUMBAI: Low global steel prices in the December quarter (Q3) sent Tata Steel Ltd into the red, with India’s largest private sector steelmaker reporting a consolidated net loss of ₹1,228.53 crore. It had reported a net profit of ₹1,753 crore in the year-ago period.
The company’s performance is likely to disappoint market participants when the bourses open on Monday; a Bloomberg poll of nine analysts had expected a net profit of ₹75.41 crore for the quarter.
Consolidated revenue fell 8.9% year-on-year to ₹35,520 crore during Q3, even though steel sales rose 13% to 7.31 million tonnes (mt) from 6.47 mt a year ago. Operating revenue (or earnings before interest, tax, depreciation and amortization, Ebitda) nearly halved to ₹3,659 crore in Q3, from ₹6,726 crore in the previous year, while Ebitda per tonne fell to ₹5,003 from ₹10,404 in Q3FY19.
Even as global steel sales dragged the company into a loss, Tata Steel’s domestic performance during the quarter held firm, despite a tough operating environment. Net profit from India operations was ₹1,194 crore, down 47% year-on-year. Revenue fell 4.6% to ₹21,299 crore, even though steel sales rose 25% in the quarter to 4.85mt.
The company said branded products and retail segment volumes jumped 22% quarter-onquarter, while the industrial product and projects segment registered a healthy 12% growth.
“Despite the continued slowdown in automotive industry, the company successfully maintained its sales volumes in automotive and special products segment,” it said in a statement.
Tata Steel said gross debt during the quarter was at ₹1.09 trillion, while net debt stood at ₹1.04 trillion, falling by ₹2,324 crore from the preceding quarter.
“The economy remained weak during the quarter and domestic steel prices reached a nadir in October 2019.
However, steel prices are on an upward trend since November with inventory rationalization and increase in government spending,” said the company statement.