Tata Steel has reported a 126.17 per cent increase in consolidated net profit for the quarter ended June 30, 2015, at Rs 762.96 crore, as against Rs 337.33 crore in the same quarter last year. The profits were aided by one-time exceptional gain of Rs 158.43 crore, as against a loss of Rs 262.42 crore in the same period, last year.
Net sales for the Indian steel giant, however, fell 17.28 per cent to Rs 29,900.1 crore, compared with Rs 36,146.77 crore in the year-ago period, the company said.
As far as European operations are concerned, turnover in Q1FY16 was Rs 17,855 crore, compared with Rs 20,741 crores in Q1FY15 and Rs 19,537 crores in Q4FY15. The drop in turnover was driven by the continued fall in raw material prices, which dampened realisations. Q1FY16 EBITDA fell 42 per cent to Rs 575 crore from Rs 995 crore in Q1FY15 and Rs 1,053 crore in Q4FY15. The decrease was largely attributable to the adverse sterling euro currency movement impacting the UK operations, Tata Steel said.
During the quarter, Tata Steel continued its strategy of monetising non-core assets, and raised about Rs 1,000 crore by selling a part of its equity portfolio. Strong focus on cash flow management has helped the company maintain underlying debt, despite incurring more than Rs 3,200 crore on capex during the quarter.
The long products business of Tata Steel Europe has been hived off into a separate wholly owned subsidiary.
While the long product business faces challenges due to poor market conditions, the separation of the long products division into a separate legal entity provides flexibility to evaluate alternative strategic options, the company said.