Tata Steel reports Q3 net loss of Rs2,224 cr amidst slump in Europeaan markets
08 Feb 2023
Steel major Tata Steel on Monday reported a consolidated net loss of Rs2,223.84 crore for the October-December 2022-23 quarter, following a sharp drop in European sales and higher tax outgo on account of a non-cash deferred tax expense on the British Steel Pension Scheme. This is a decline of 76 per cent from Rs9,572.67 crore profit posted in the corresponding quarter of the previous year.
The company reported consolidated revenues from operations of Rs56,756.61 crore, down 6.2 per cent from Rs60,524.72 crore in the year-ago period.
The company's revenue from operations declined 6 per cent to Rs57,083.56 crore for the period under review compared to Rs60,783 crore in the year-ago period.
Expenses for the quarter rose to Rs57,172.02 crore from Rs48,666.02 crore in the year-ago period.
Consolidated EBITDA for the quarter stood at Rs4,154 crore. EBITDA margin also dropped to 7 per cent, reflecting a sharp drop in realisations and profitability in Europe.
“Our deliveries were lower in 9MFY23 due to slowdown in demand. Recession concerns weighed on steel prices, which coupled with elevated energy costs affected our performance," Tata Steel CEO and MD TV Narendran said on Tata Steel’s European business.
"Tata Steel has delivered steady growth in India volumes despite the volatile operating environment. Domestic deliveries stood at around 13.7 million tons in the first nine months of the financial year and were up 4 per cent YoY. We are presently expanding our capacities across multiple sites at Tata Steel Kalinganagar, Neelachal Ispat Nigam Limited and the Electric Arc Furnace at Ludhiana in Punjab and at our downstream plants across India," Narendran added.
“Recession concerns weighed on steel prices, which coupled with elevated energy costs affected our performance,” he said.
Further, the company said the British Steel Pension Scheme (BSPS) with Tata Steel UK as sponsor had completed a substantial part of its de-risking journey with 60 per cent of its liabilities insured.
The buy-in transaction along with actuarial movements resulted in a non-cash deferred tax expense of Rs 1,783 crore and increased the overall deferred tax expense for the quarter to Rs 2,150 crore.
On a standalone basis, Tata Steel recorded a net profit of Rs2,705.13 crore as against Rs7,683.39 crore in the year-ago period. Narendran said in India, Tata Steel delivered steady growth in volumes despite the volatile operating environment.
Tata Steel’s domestic business posted a profit of Rs1,918 crore and a revenue of Rs32,325 crore for the period under review.
Domestic deliveries, he said, stood at about 13.7 million tonnes in the first nine months of the financial year and were up 4 per cent YoY. For the quarter, they were up 11 per cent YoY.
Tata Steel’s crude steel production touched 5 million tonnes in 3QFY23 for the first time in India, with Neelachal Ispat Nigam limited commencing operations.