Tata Steel Group posted turnover of Rs.27,471 crores for the second quarter

For Q2FY17, Tata Steel Group delivered 5.65 mt of steel and posted turnover of Rs.27,471 crores.

Q2FY17 EBITDA of Rs. 2,992 crores was lower by 8.5% over Q1FY17; the company attributed the drop in margins to lower realisations in India and ramp-up costs of Kalinganagar.

But compared to the year-ago quarter, EBITDA was 66% higher largely due to significant improvement in the operating performance at Tata Steel Europe, the company reported.

The Group's consolidated performance reports posted pre-exceptional underlying Profit Before Tax of Rs.251 crores compared to a profit of Rs. 1,080 crores in Q1FY17 and a loss of Rs.569 crores in Q2FY16.

For Q2FY17, the Group reported a loss of Rs.2,656 crores under its Total Comprehensive Income head due to Other Comprehensive Income loss of Rs 2,607 crores largely on account of re-measurement of acturial benefits on post-employment defined benefits.

For the reported quarter, the Group said its gross debt decreased by Rs.1,159 crores to Rs.84,316 crores and net debt stood at Rs.75,563 crores.

For its India business, Tata Steel reported delivery of 2.62mt, which 23% higher from the immediate previous quarter and 13% more compared to the year-ago quarter.

According to the company, operations and rampup at Tata Steel Kalinaganagar has been as per plan, which helped increase overall deliveries.  

However, due to the ramp-up phase in the first full quarter of operations, operating costs and margins were adversely affected.   

It also led to an increase in interest and depreciation costs which affected the Profit After Tax, the company said.

Tata Steel Kalinganagar has already reached a major milestone production of 1mt of Hot Metal in less than 6 months of formal commissioning. 

The company expects to produce and sell more than 1.3mt in FY17.

EBITDA during the quarter for the India business stood at Rs.2,000 crores,  lower by 10.6% qoq, and representing an EBITDA margin of 17%.

The company attributed the fall in margins to fall in domestic realisations, higher ramp-up costs at Tata Steel Kalingangar and one-off regulatory costs in mining operations. 

EBITDA/tonne was Rs.7,620.

For its European business, Tata Steel reported that its differentiated product sales increased by 14% from the year ago quarter and now accounts for 35% of total sales.

In Europe, its liquid steel production of 2.73mt for the reported quarter was 5% lower from the year-ago quarter but and  2% higher from the immediately preceding quarter.

The company said that deliveries in this seasonally quieter quarter dropped by 17% compared to the year-ago quarter by and 9% from the previous quarter.

According to the company, it is a reflection of its decision to restructure and focus on higher-value markets, rather than volume.

The European quarter's EBITDA improved to Rs.1,035 crores, compared with Rs.856 crores in Q1FY17 following a stronger performance in Netherlands, impact of earlier restructuring in UK and depreciation of the pound relative to Euro. EBITDA/tonne for the quarter of Rs.4,500/t, improved by 33% compared to last quarter.

Tata Steel in its South East Asian business, saw an improvement in its operating and financial performance, which rose to Rs. 74 crores during the quarter as compared to Rs. 41 crores in the previous quarter.

Revenues for South East Asia decreased by 2.7% from the previous quarter on the back of lower Singapore sales.

EBITDA declined by 63% from the previous quarter largely on the back of decline in downstream spreads at NatSteel due to continued dumping pressure from China.