Tata Steel posted a 93 per cent drop in its net profit after tax on a year-on-year (YoY) basis in its first quarter (Q1) earnings on Monday. It logged a net profit of Rs 524.8 crore for the June quarter in the current financial year (FY24) down from Rs 7,714 crore in the first quarter of the previous fiscal year (FY23).
It reported about 6 per cent fall in total revenue from operations at Rs 59,490 crore approximately, down from Rs 63,430 crore on a YoY basis. The revenue for the reported quarter fell by 5.5 per cent against Rs 62,961 crore reported in the last quarter of the previous fiscal year (Q4FY23).
The company’s EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) stood 65.4 per cent lower at Rs 5,173.9 crore in the reported quarter compared to Rs 14,973 crore on a YoY basis, as reported by CNBC TV18.
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The steel manufacturer mentioned that Tata Steel UK has successfully been derisked following the insurance buy-in of the British Steel Pension Scheme (BSPS), which has affected the profit. It’s deliveries in India increased by 18 per cent on YoY basis, while the crude steel production in India stood around 5 million tonne, up by about 2 per cent on a YoY basis.
Chief executive officer and managing director, T V Narendran, noted that global economic recovery continued to face restraints, in turn affecting the prices of commodities including steel.
Koushik Chatterjee, executive director and chief financial officer, added, “In Europe, margins were broadly similar on QoQ basis as a rise in revenue per tonne was offset by lower volumes and elevated input costs. In the UK, the buy-in transaction for the residual liabilities of the British Steel Pension Scheme has been completed, successfully derisking Tata Steel UK. Volatility in steel markets has impacted working capital and cash flows but we continue to commit to growth in India and spent Rs 4,089 crore on capital expenditure during the quarter. This has led to a net debt of Rs 71,397 crore.”
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