Tata Steel’s fourth quarter profit plunged 64.59 per cent to ₹554.56 crore compared with ₹1,566.24 crore in Q4FY23, dragged down by its weak European business. Revenue from operations slipped 6.09 per cent to ₹58,445.89 crore compared with ₹62,238.78 crore a year ago.
For the full year, Tata Steel swung to a loss of ₹4,909.61 crore against a profit of ₹8,075.35 crore in FY23. Revenue from operations slid 5.9 per cent to ₹227,296.2 crore compared with ₹241,636.25 crore in FY23. The board of the company, however, recommended a dividend of ₹3.6 per share of face value ₹1 (360 per cent).
Sequentially, the revenue was up 6.1 per cent while profit went up 6.3 per cent on a consolidated basis.
The Indian operations, which are structurally stronger than Europe due to captive mine linkage, performed better with profit stable at ₹3,856 crore in Q4FY24 compared with ₹3,890 crore a year ago. For the full year, however, profit plunged to ₹3,847 crore in FY24 from ₹13,749 crore in FY23. The Indian operations achieved the highest ever crude steel production and deliveries of 20.8 million tonnes (mt) and 19.9 mt, respectively.
Tata Steel spent ₹4,850 crore on capital expenditure and ₹18,207 crore for the full year. The phased commissioning of the 5mt expansion is in progress. Deliveries from India now make up 68 per cent of total deliveries and the share would grow further once new capacity comes up.
T.V. Narendran, managing director and CEO, described FY24 as ‘a year of progress’ for Tata Steel amidst a challenging operating environment.
Big spending plan
The Tata Steel board has approved the proposal to infuse $2.11 billion (₹17,407.5 crore) by way of subscription to equity shares of T Steel Holdings Pte Ltd (TSHP), a wholly owned subsidiary, in one or more tranches in FY25.
The company said the funds will be used to repay external debt in Tata Steel’s offshore subsidiaries and to support the restructuring cost in Tata Steel UK, the wholly owned subsidiary of TSL.
Existing debt instruments aggregating up to $565 million (₹4,661.25 crore), held by TSL in TSHP, will also be converted into equity shares of TSHP.
Commenting on the UK transition plan, Narendra said, “We have decided to proceed with the proposed restructuring of heavy end UK assets and transition to greener steel making after due consideration of all the options over the last seven months in consultation with the union representatives.”
The UK, which posted a revenue of £647 million and an EBIDTA loss of £34 million, is expected to witness the two blast furnaces at Port Talbot, Wales to be shut down by the end of June and September.
Koushik Chatterjee, executive director and CFO, said the company will place equipment orders by September 2024.
“(We) have signed the agreement with the UK National Grid securing the high voltage connection, which will be available on schedule.” He also informed that TSUK has offered the best ever package of support for affected employees in Tata Steel UK. “We have also agreed on the final and detailed terms of the grant package with the UK government to support the £1.25 billion investment,” he added.
