Tata Steel gains after strong Q4 outcome

4 May 2022 , 09:40 AM

On a consolidated basis, profit before tax (PBT) rose 17% year-on-year to Rs 12139.26 crore in Q4 March 2022.

Adjusted EBITDA rose 14.05% YoY to Rs 15,891 crore during the quarter. Adjusted EBITDA rose 11.43% YoY to Rs 19,832 per ton in Q4 March 2022.

For the full year, the steel majors net profit surged 436.08% to Rs 40153.93 crore on 55.91% rise in turnover to Rs 2,43,959 crore in the year ended March 2022 over the year ended March 2021.

The company reported highest ever consolidated EBITDA of Rs 63,830 crore (up 106.62% YoY) with an EBITDA per ton of Rs 21,626 (up 99.54% YoY).

In India, the steel major achieved highest ever annual crude steel production of 19.06 million tons, with a growth of 13% YoY. It reported highest ever deliveries of 18.27 million tons (up 5.61% YoY) despite COVID 2nd wave related disruption early in financial year.

In Europe, the companys revenues increased by 54% YoY to ?8,876 million. EBITDA stood at ?1,199 million, translates to an EBITDA per ton of ?133.

Consolidated free cash flow was Rs 27,185 crore despite an increase in working capital of Rs 9,618 crore, capex of Rs 10,522 crore and taxes of Rs 11,902 crore.

Gross debt stood at Rs 75,561 crore with net repayments of Rs 15,232 crore. Net debt declined to Rs 51,049 crore. Net debt to EBITDA improved to 0.80x, while net debt to equity improved to 0.52x.

The company said that the 6 MTPA Pellet plant at Kalinganagar will be commissioned in 3QFY23 followed by the Cold Roll Mill complex and the 5 MTPA expansion.

The board recommended a dividend of Rs 51 per share for the Financial Year ended 31 March 2022.

The board also considered the proposal for sub-division of 1 equity share having face value of Rs 10 each into ten equity shares having face value of Re 1 each (10-for-1).

V Narendran, chief executive officer & managing director: Tata Steel has again demonstrated its ability to deliver stellar results despite heightened complexity in the face of COVID as well as geopolitical tensions. Our Indian business showed broad based growth across our chosen segments due to our sustained focus on customer relationships, our distribution network and our portfolio of brands supported by our agile business model. Our European operations delivered robust performance as the transformation programme undertaken helped to leverage the strong business environment. We have pursued several initiatives to de-risk the business particularly across procurement and supply chain and continue to invest in technology and digitisation to drive productivity and improve our resilience. Kalinganagar expansion is progressing well and will drive cost savings as well as product mix enrichment. The acquisition of Neelachal Ispat Nigam Limited will be closed in 1QFY23 and we will scale it up rapidly to drive expansion of our high value retail business. I am happy to share that Tata Steel has been recognised as Steel sustainability champion for the fifth year in a row by the WorldSteel.

Koushik Chatterjee, executive director and chief financial officer: We have closed the financial year with consistent and record operating and financial performance for the year, surpassing the previous best in FY21, with EBIDTA being 2x and Profit after Tax being >5x the previous year. This is despite the significant surge in international coal prices and inflationary impact of various commodities. Our full year consolidated revenues stood at Rs 2,43,959 crores and EBIDTA was Rs 63,830 crores which works out to a margin of 26% and EBITDA per ton of Rs 21,626. Our cash outflow for the capex in the year was Rs 10,522 crores, which is well within our earlier guidance. We continue to focus on deleveraging while advancing on our strategic growth priorities – our focus is on completion of the Kalinganagar expansion. We have repaid Rs 15,232 crores during the year. As a result of the strong financial performance, our Net Debt to EBIDTA has further improved to 0.8x and our financial metrics continue to be well within investment grade level. As part of the overall policy to reward the shareholders the Board has recommended a record dividend of Rs 51 per share and have also recommended the splitting of the shares to Rs 1 per share face value in a 10:1 split.

Tata Steel is among the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum. It is one of the worlds most geographically diversified steel producers, with operations and commercial presence across the world.

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