Tata Steel reports Rs5,674 crore consolidated Q4 net loss

Tata Steel Ltd has reported a consolidated quarterly loss of Rs5,674 crore ($888.8 million) for the fiscal fourth quarter ended 31 March 2015 against a net profit of Rs1,036 crore in the year-ago quarter.

Profit after tax for the financial year 2014-15 was flat at Rs6,439 crore against Rs6,412 crore in FY'14.

Turnover for the quarter stood at Rs33,666 crore while turnover for the financial year stood at Rs139,504 crore. The company declared an equity dividend of Rs8 per share for the quarter.

The company recorded steel deliveries of 26.32 million tonnes for the year and 7.06 million tonnes for the quarter.

Tata Steel said the Indian steel industry witnessed subdued demand across steel-consuming industries, especially with a surge in low priced imports from China, Japan and Korea, which led to a sharp correction in steel prices during the last few months of the year.

Despite these challenges, the company said its Indian operations recorded best ever production in hot metal, crude steel and saleable steel and successfully ramped up deliveries across its key business segments.

Automotive and special products sales rose 15 per cent over the previous year while branded products, retail and solutions sales increased by 10 per cent. Brands such as Tata Tiscon, Tata Shaktee and Tata Steelium registered best ever sales during the year .

The company's captive iron ore mines were in operation through Q4FY'15 and the mining operations were able to return to their normal levels.

Turnover in FY'15 was Rs41,785 crore against Rs41,711 crore in FY'14 as the benefits of higher volumes were largely offset by lower realisations and weak demand.

Fourth quarter FY15 turnover increased by 7 per cent to Rs10,635 crore from Rs9,897 crore in the previous quarter but fell 13 per cent from Rs12,191 crore in Q4FY'14. The quarter-on-quarter improvement in revenue was driven by higher volumes partially offset by lower realisations.

EBITDA for the fiscal declined by 24 per cent to Rs10,102 crore from Rs13,281 crore in FY'14.

Fourth quarter FY15 EBITDA was Rs1,661 crore against Rs1,979 crore in Q3FY'15 and Rs4,052 crore in Q4FY'14. The decline was driven by a steep fall in realisations combined with an increase in iron ore costs on purchased iron ore that was procured to support the operations during the previous quarters when the captive mining operations were closed due to regulatory actions.

The results follow the company's announcement last week of about $785 million non-cash charge in the fourth quarter, mainly related to its loss-making long products unit in the United Kingdom.

Tata Steel, Europe's second-largest steelmaker, has been in talks with Geneva-based Klesch Group for the sale of its European long-products unit and said last week said it would take the impairment charge.

The company said volume output in Europe was stable, despite being constrained by demand and operational issues. Lower turnover was due to reduced sales prices. Operating profit improved nevertheless, with EBIT turning positive.

Further strong progress was made in the market differentiation strategy in Europe.

Differentiated products sales represented more than a third of overall sales for the year as a whole. Sales of new products surged 16 per cent by volume and the company raised the total of new products in its portfolio to 113 by the end of FY15.

Liquid steel production in FY'15 declined by 2.5 per cent to 15.16 million tonnes from 15.55 million tonnes in FY'14. Q4FY'15 production of 3.91 million tonnes was 4.5 per cent higher than the 3.74 million tonnes produced in Q3FY'15 and 3 per cent lower than the 4.04 million tonnes produced in Q4FY'14.