Weak performance at its European unit dragged Tata Steel into losses in the three months to December, with Asias oldest maker of the primary infrastructure alloy pruning debt costs to restrain expenses in an environment the management described as very challenging.The Mumbai-based company reported a consolidated net loss of 1,229 crore in the quarter, compared with a net profit of 1,753 crore for the same quarter last year.
Tata Steels European business reported a loss of 956 crore, reflecting the protracted demand slump in the continent where the UKs exit from a common market has amplified the broader low-growth impact.The companys India business recorded a net profit of 1,194 crore in Q3FY20, a 47 per cent decline against 2,253 crore in the same quarter last year.
Indias steel production stood at 4.47 million tonnes, a shade lower than 4.50 million tonnes in Q2FY20.Consolidated Ebitda (earnings before interest, taxes, depreciation and amortisation) per tonne nearly halved to 5,003.Economic conditions remained very challenging during the quarter which impacted the overall business performance, said the companys CFO Koushik Chatterjee.
We have also successfully refinanced 1.75 billion of debt at Tata Steel Europe at more favourable terms.
We will continue to look at capital allocation in the next year very sharply.Consolidated revenue increased 3 per cent quarter on quarter (QoQ) to 35,520 crore, while India revenue climbed 5 per cent QoQ and stood at 21,299 crore.
Consolidated Ebitda declined 42 per cent to 3,659 crore.The sales volume in India operations is in line and, in fact, slightly better than what we expected, but Corus (Tata Steel Europe) has delivered a shocking result, and it looks like a pretty volatile quarter, which is driven by a fall in steel prices in Europe, said an analyst tracking the steel sector.Branded products and retail segment volumes rose 22 per cent QoQ, the industrial product and projects segment also registered a healthy 12 per cent QoQ growth.
The company maintained the same 0.42 MT of sales volumes in the automotive segment.We were also able to maintain our sales to the auto segment despite the sluggishness faced by the auto industry.
Both our acquisitions, Tata Steel BSL and Tata Steel Long Products, continue to deliver operational improvements and achieve milestones in the marketplace, said Tata Steel CEO, TV Narendran.The company said it expects to commission its pellet plant and cold rolling mill facility at Kalinganagar by FY21.Our Kalinganagar phase II expansion is progressing well and we expect to commission the pellet plant and our cold rolling mill facility by FY21.
We have recently won chrome ore blocks which will enable us to service our existing ferro chrome customers, said Narendran.