Tata Steel Q1 net more than doubles to Rs763 crore

Tata Steel's consolidated net profit more than doubled in the first quarter of the current financial year to Rs763 crore compared to Rs337 crore in the corresponding quarter of the previous fiscal.

Tata Steel said its net profit for the quarter was supported by higher other incomes, which grew 250 per cent annually to Rs762 crore and a one-time gain of Rs158 crore, which was booked as profit on sale of long term investment.

However, its revenue fell 17 per cent annually to Rs29,90 Rs.30,300  crore compared to Rs.36,427 crore in the year-ago quarter on account of decline in steel prices.

Standalone net profit for the first quarter was down 45 per cent at Rs1,249 crore compared to Rs2,268 crore in the corresponding quarter of the previous fiscal.

Tata Steel's EBITDA or operating profit came in at Rs2,778 crore against Rs4,273 crore in the year ago period.

Tata Steel's India business showed some improvement in the June quarter while its European business showcased muted growth.

Tata Steel's India volume increased 2 per cent year-on-year to 2.1 million tonnes while its volumes in Europe remained flat at 3.44 million tonnes.

Tata Steel's EBITDA / tonne from its Indian operations stood at Rs7,787, up 10 per cent from the previous quarter ended 31 March, while EBDTA for its European business stood at $26 against $44 sequentially.

Consolidated turnover in Q1FY'16 was Rs9,094 crore compared to Rs10,635 crore in Q4FY'15 and Rs10,468 crore in Q1FY'15. The benefits of higher volumes y-o-y were largely offset by the fall in realisations.

European operations
Liquid steel production and deliveries in Europe increased by more than 7 per cent year-on-year in Q1FY'16, reflecting the more stable operating platform. But surging EU imports, especially from China, and, in the case of the UK operations, the appreciation of sterling against the euro, led to lower turnover and EBIT.

Tata Steel's European Q1FY'16 liquid steel production was 3.96 million tonnes, up 1.4 per cent from Q4FY'15's 3.91 million tonnes and up 7 per cent on Q1 FY15's 3.70 million tonnes. Q1FY'16 deliveries of 3.44 million tonnes were down 9.6 per cent on Q4FY15's 3.81 million tonnes but up 7.5 percent on Q1FY15's 3.20mt.

Kalinganagar project
The phased commissioning at the state-of-the art Kalinganagar Phase-I Steel Plant is progressing satisfactorily. The coke oven heating process commenced in May and commercial production of coils is expected to commence in H2FY'16.

The 3 mtpa plant will enhance the company's capability to meet the increasing requirement for high-strength automotive grades, high-end API grades and will help the company develop unique grades with tighter tolerances.

Mining update
All of Tata Steel's iron ore, chromite and manganese mines (except Malda) in Odisha are currently operational.

The company has executed supplementary lease deeds for Joda East, Khondbond, Joda West, Manmora, Bamebari and Tiringpahar extending the lease period to 31 March 2030 and for Gomardih, a non-captive mine, till 31 March 2020.

The government of Odisha has decided and extended the lease of Sukinda on non-captive basis up to 31 March 2020. A supplementary lease deed is expected to be executed shortly.

Tata Steel has reported 45 per cent fall in its standalone net profit at Rs.1,249 crore for the first quarter of this fiscal when compared with Rs.2268 crore in the corresponding period of previous fiscal. Total income of the company stood at Rs.9,094 crore as against Rs.10,468 crore, posting a decline of 13 per cent.

However, on a consolidated basis, the net profit more than doubled to Rs.763 crore from Rs.337 crore. But, total income fell by 17 per cent at Rs.30,300 crore when compared with Rs.36,427 crore.