Tata Steel on Friday reported a nearly fivefold jump in its consolidated net profit to Rs 1,136 crore for the three months to December.
Exceptional charges of Rs 1,116 crore due to provision recognised in respect of certain demands and claims from regulatory authorities relating to mining operations hit profit. In the December 2016 quarter, the steel maker had reported a net profit of Rs 232 crore. Net sales in Q3FY18 grew 15.23 per cent year-on-year to Rs 33,447 crore, much above the consensus estimates of Rs 32,027 crore.
Consolidated Ebitda (earnings before interest, taxes, depreciation and amortisation) rose by a hefty 59 per cent y-o-y to Rs5,801 crore, driving up the Ebitda margin by a smart 430 basis points to 17.3 per cent. Executive director and chief financial officer Koushik Chatterjee said the strong performance was primarily driven by improved volumes in India and stronger realisations across geographies, on the back of improvement in commodity prices and an expansion in spreads globally.
Tata Steel’s gross debt decreased by Rs1,658 crore over September and stood at Rs 88,601 crore mainly due to repayments and positive forex impact. Chatterjee said the group’s liquidity position remains robust with Rs 22,544 crore in cash and cash equivalents and undrawn bank lines. Capital expenditure for the quarter was about Rs 2,002 crore.
“We continue to focus on opportunistically raising capital and optimising our financing flexibility. We recently refinanced some of our debt by raising $1.3 billion in the international debt capital markets through a dual tranche bond issuance. This has helped us to further improve our debt maturity profile, diversify our investor base and reduce our cost of debt. We have also announced a rights issue of Rs 12,800 crore, the proceeds of which will be used for the purpose of deleveraging and general corporate purposes,” Chatterjee added.
The rights issue will open on February 14 and will close on February 28. The company’s board at its meeting held on January 19 had approved the ‘simultaneous but unlinked’ issue of ordinary shares of face value of Rs 10 each, on a rights basis. In an impressive performance, domestic deliveries grew 10 per cent year-on-year to 3.30 million tonnes in the December quarter, beating the year-on-year steel consumption growth in India of 7 per cent. Also, sales
volume growth was witnessed across all verticals, with the company registering its best ever performance.
TV Narendran, chief executive officer and managing director, said the company’s focus on India continues as it looks to expand the Kalinganagar site as well as pursue inorganic growth opportunities. He added that the company is progressing well on the joint venture with Thyssenkrupp and is committed to building a long-term investment in strong European portfolio. (FE)