Tata Steel reported a 4.3 times jump in profit after tax and earned its highest ever consolidated EBIDTA in the third quarter on the back of an unprecedented price of the alloy in the domestic market, overshadowing a sustained weak performance of the European business.
Taking full advantage of the upside from captive iron ore mines and a strong bounceback in demand after the pandemic-led disruption, the company’s Indian operation performed brilliantly, helping it to reduce net debt by Rs 10,325 crore in the the third quarter alone, topping up on Rs 8,258 crore in the first six months. It has guided to reduce gross debt by Rs 12,000 crore further in the fourth quarter.
Profit after tax of the India operation, which includes key subsidiaries Tata Steel BSL and Tata Steel Long Products, was Rs 4,832 crore compared with Rs 1,194 crore in the same period last fiscal.
On a sequential basis, the profit jumped 2.4 per cent from Rs 2,606 crore reported in the second quarter.
On a consolidated basis, which includes installed capacity of 10 million tonne in the Netherlands and the United Kingdom, profit stood at Rs 3,989 crore compared with a loss of Rs 1,166 crore in the same period last fiscal and profit of Rs 1,635 crore in the second quarter of this fiscal.
Turnover of the company, however, went up by 18.3 per cent to Rs 25,211 crore in Q3 compared with Rs 21,299 crore in the same period last year.
On a consolidated basis, the turnover went up by 11.4 per cent to Rs 39,594 crore from Rs 35,520 crore a year ago.
Deliveries from the India business fell marginally to 4.65 million tonne (mt) from 4.85mt a year ago because of lower inventory at the beginning of the quarter. It stood at 7.2mt compared with 6.99mt in Q3 of 2019-20 on a consolidated basis.
The EBIDTA in the third quarter, reflecting the underlying business performance, stood at Rs 8,811 crore, enabling Rs 18,931 EBIDTA per tonne for the India business.
The robust performance allowed the company to restart key capital expenditure in Kalinganagar, Odisha.
“Given the strong market conditions and our success with deleveraging, we have restarted work on the pellet plant and the cold rolling mill complex at Kalinganagar which will help in reducing costs and improving revenues,” said T.V. Narendran, managing director and CEO of Tata Steel.
The company said it was looking to explore a ‘strategic solution’ after talks with SSAB for sale of the Netherlands business fell through last month.
Koushik Chatterjee, executive director and CFO of Tata Steel, said the company’s credit matrix has improved significantly, surpassing the annual deleveraging target of $1 billion.
“We continued to aggressively reduce our net debt by Rs 10,325 crore and gross debt by Rs 5,640 crore during the quarter, taking the nine month reduction in net debt by Rs 18,609 crore ($2.55billion) and gross debt by Rs 7,649 crore.”
Adani Ports
Adani Ports and Special Economic Zone (APSEZ) on Tuesday reported a 16.22 per cent increase in its consolidated profit to Rs 1,576.53 crore for the December quarter of 2020.
The company had clocked a consolidated profit of Rs 1,356.43 crore a year ago, the company said in a regulatory filing to the BSE. Its total consolidated income increased to Rs 4,274.79 crore in the third quarter from Rs 3,830.43 crore in the year-ago period.
