“In India, which is a structurally attractive market, we have delivered improved margins and continued to expand our footprint in terms of volumes as well as product portfolio. Our domestic deliveries were best ever at around 19 million tons and were up nine per cent YoY with broad-based improvement across chosen market segments,” said T V Narendran, Chief Executive Officer (CEO) and Managing Director (MD), Tata Steel.
Also Read: Tata Steel to invest $2.11 bn in Singapore unit to repay overseas debt, fund UK transition
‘’Automotive volumes were aided by higher deliveries of hot-rolled and cold-rolled steel to auto OEMs while our well-established retail brand Tata Tiscon crossed two million tons on an annual basis. ..Overall, India deliveries now make up 68 per cent of total deliveries and will continue to grow with incremental volumes from five MTPA capacity expansion at Kalinganagar,” added Narendran.
Here are 5 key highlights of Tata Steel Q4 Scorecard:
1.P&L Account: Income, EBITDA
The Tata Group company reported a drop in net profit pressured by lower steel prices and restructuring expenses on some of its loss-making operations. Domestic steel prices remained under pressure during the quarter as India imported higher volumes of finished steel from top producer China. The steelmaker’s revenue fell owing to a nearly four per cent drop in its mainstay India business, which contributed at least 62 per cent of the overall revenue.
On the operating level, Tata Steel’s earnings before interest, taxes, depreciation, and amortization (EBITDA) in the March quarter dropped 8.6 per cent to ₹6,600.7 crore, compared to ₹7,219 crore in the same period last year. Margin dropped 20 basis points (bps) to 11.3 per cent compared to 11.5 per cent in the year-ago period.
2.Dividend
Tata Steel’s board recommended a dividend of ₹3.60 per ordinary (equity) share of face value Re 1 each, at 360 per cent to the shareholders of the company for FY24. The dividend is subject to the approval of the shareholders at the annual general meeting (AGM), which is scheduled to be held on Monday, July 15, 2024.
The dividend, if approved by the shareholders at the AGM, will be paid, subject to deduction of applicable tax at source, on and from Friday, July 19, 2024. The board has fixed Friday, June 21, 2024, as the record date for determining the members entitled to receive the dividend for FY24.
3.Investment in Singapore unit
Tata Steel’s board approved the proposal to infuse funds up to $2.11 billion (~ ₹17,407.50 crore) by way of subscription to equity shares of T Steel Holdings Pte. Ltd (TSHP), the company’s wholly-owned foreign subsidiary. The investment in the holding company for shares of Tata Steel’s overseas subsidiaries, will be done in one or more tranches over the course of 2024-25.
The proposed fund infusion will be used by TSHP to repay the existing external debt at offshore entities and to support the restructuring costs at Tata Steel UK Limited, a wholly owned subsidiary of Tata Steel.
The board also approved writing off existing debt and the proposal to convert debt instruments aggregating to $565 million (~ ₹4,661.25 crore) held by the company in T Steel Holdings into equity shares during FY25. Tata Steel will hold hold these converted equity shares. With the above transactions, Tata Steel will continue to hold 100 per cent equity shareholding in TSHP.
4.Issuance of NCDs
Tata Steel’s board reviewed the financing plan of the company and based on the review, approved issue of additional debt securities, in one or more tranches, up to ₹3,000 crore in the form of non-convertible debentures (NCDs) on a private placement basis. Further, the board of directors has authorized a committee of Directors to determine and approve the quantum, timing and terms and conditions of the issue of the NCDs.
Also Read: Tata steel results Today: Here’s what analysts expect, from financials to key monitorable
5.Other key metrics
Tata Steel’s consolidated revenues for FY24 were at ₹2,29,171 crore. EBITDA stood at ₹23,402 crore and was primarily driven by improved performance at India operations. The company has spent ₹4,850 crore on capital expenditure during the March quarter and ₹18,207 crore for the full year.
The net debt stands at ₹77,550 crore. Liquidity was at ₹31,767 crore, which includes cash & cash equivalents of ₹9,532 crore.
India segment revenues were ₹1,42,902 crore for the full year and were marginally higher on a YoY basis. The business achieved its highest-ever crude steel production of ~20.8 million tons and deliveries of ~19.9 million tons. The domestic deliveries were up nine percent YoY, leveraging India’s steel demand growth.
UK segment’s annual revenues were £2,706 million and EBITDA loss stood at £364 million. Liquid steel production was 2.99 million tons while deliveries stood at 2.80 million tons. For the quarter, revenues were £647 million and EBITDA loss stood at £34 million.
Netherlands annual revenues were £5,276 million and EBITDA loss stood at £368 mn, largely due to the reline of BF6 which was completed in early February. Liquid steel production was 4.81 mn tons and deliveries were 5.33 mn tons. For the quarter, revenues were £1,324 mn and EBITDA loss was at £27 mn.
Following seven months of formal and informal national-level discussions with the UK trade unions, Tata Steel will start the closure of heavy-end assets in June and proceed with its plan to invest in an electric arc furnace at Port Talbot.
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Published: 29 May 2024, 07:24 PM IST
