Tata Steel losses increase 10-fold in Q1 at Rs 3,183 cr

Tata Steel losses increase 10-fold in Q1 at Rs 3,183 cr

Explores JV for European business

Tata Steel losses increase 10-fold in Q1 at Rs 3,183 cr

Tata Steel has reported over a ten-fold increase in consolidated net losses for the quarter ended June 30, 2016, at Rs 3183.07 crore, compared with a loss of Rs 316.91 crore in the same quarter previous year (Q1FY16).

During the quarter, Tata Steel Europe discontinued the operations of its Long Products business, and on May 31, 2016, completed its sale to Greybull Capital. Loss on disposal amounting to Rs 3,296.48 crore has been included in the profit/loss after tax on discontinued operations, Tata Steel said.

Total income from operations for the company during the quarter declined 5.77%, to Rs 26,406.1 crore, compared with Rs 28,025.43 crore in Q1FY16. EBIDTA during the quarter improved 65% sequentially to Rs 3,270 crore, due to an improved operating performance across India, Europe and Southeast Asia. EBIDTA margin of 12.4% expanded by 520 bps, compared with 7.2% in Q4FY16, and 280 bps compared with 9.6% in Q1FY16, the company said.

As far as performance of the Indian arm is concerned, EBIDTA stood at Rs 2,236 crore, representing EBIDTA margin of 22%, which expanded by 250 bps sequentially due to higher realisations and focus on value-added products. EBIDTA/tonne for the quarter stood at Rs 10,455, 27% higher compared with Q4FY16, and 19% compared with Q1FY16, the company said.

EBIDTA for European operations stood at Rs 856 crore compared with a loss of Rs 578 crore in Q4FY16 on the back of the depreciation of pound, short term improvement in steel prices, impact of restructuring undertaken earlier in the UK and stronger performance in the Netherlands. EBIDTA/tonne for the quarter stood at Rs 3,384/tonne, the company said.

Tata Steel also provided an update with regards to its UK, as well as European operations. “Tata Steel UK is currently progressing with the divestment of the specialty steel business and the pipe mills in Hartlepool. The shortlisted bidders are being given access to due diligence and management meetings,” the company said.

 “Tata Steel Europe continues to be in discussion with industry players to explore options for a strategic collaboration through a potential joint venture. Appropriate disclosure in the regard will be made in due course,” the company added.

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