Tata Steel, which is the second-largest steel producer in India in terms of production capacity, has reported a 21 per cent fall in its consolidated net profit for the first quarter of the current financial year (Q1FY23).
The steel major registered a consolidated net profit of Rs 7,714 crore for the quarter ended June 30, 2022, which was lower than the corresponding quarter’s Rs 9,768 crore in FY22.
More importantly, the India business that accounts for a majority of the capacity of the steel producer, saw its net profit drop 36.5 per cent when compared to the corresponding quarter of FY22.
The standalone or the India business net profit dipped to Rs 5,783 crore in Q1FY23 from Rs 9,112 crore in Q1FY22.
“This has been a challenging quarter for the global and Indian economy with rising interest rates, supply chain constraints and slowdown in China due to COVID. Despite these multiple headwinds, Tata Steel has delivered a strong performance with an improvement in margins,” said T V Narendran, CEO & MD, Tata Steel.
Incidentally, the company achieved its highest ever quarterly EBITDA of £621 million in Europe, which translates to an EBITDA per ton of £290. Further, it reported a consolidated EBITDA of Rs 15,047 crore even as the EBITDA margin improved QoQ basis to 24 per cent while EBITDA per ton increased by Rs 3,780 to Rs 22,717.
The European business delivered a sharp improvement in performance as long-term contracts and product mix helped drive a strong increase in realizations, said a company statement.
The net debt of the company was pegged at Rs 54,504 crore with the net debt to EBITDA at 0.87 times and net debt to equity at 0.48 times.
The company further informed that Tata Steel Long Products, a subsidiary of Tata Steel, has completed the acquisition of Neelachal Ispat Nigam Limited on July 4 while the 6 million ton per annum (mtpa) pellet plant at Kalinganagar will be commissioned in the third quarter of FY23 followed by the cold roll mill complex and the 5 mtpa expansion.
“Deliveries were marginally lower by 2 per cent YoY due to moderation in exports following the imposition of 15 per cent export duty. Consequently, domestic deliveries were successfully ramped up by leveraging our strong marketing network and agile business model,” added the statement.
The company has also received the necessary approvals for a stock split in the ratio of 10:1 and it has set July 29 as the record date for the split.
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