Q4 FY’10 Group EBITDA : at Rs. 5,333 crores (US$ 1,187 million) rose 57% over Q3 FY’10 on account of greater volumes and higher prices at Tata Steel India and the much-improved operating performance at Tata Steel Europe. Group EBITDA in Q4 FY’10 rose by Rs. 5,612 crores (US$ 1,250 million) compared to EBITDA loss of 279 crores (US$ 62 million) in Q4 FY’09.
Finished steel production for Q4 FY’10 at 1.7 million tonnes rose by 4% compared to Q4 FY’09 and was almost unchanged from Q3 FY’10.
Best ever production of hot metal (7.23 million tonnes), crude steel (6.56 million tonnes) and saleable steel (6.44 million) during the year. The new ‘H’ Blast Furnace beat its design capacity by 22%, producing 3.07 million tonnes. These new hot-end records were achieved on the back of best-ever output from the iron ore mining operations. The Ore Mines & Quarries (OMQ) division’s output of 11.08 million tonnes beat the 9.42 million tonnes of FY’09, while West Bokaro recorded its highest ever clean coal output of 2.14 million tonnes (1.98 million the previous year).
New records were set in the downstream rolling facilities: hot strip output rose to 3.65 million tonnes (previous record: 3.27 million in FY’08), cold rolled coil to 1.56 million (1.53 million in FY’08) and output from the new bar mill to 0.67 million (0.61 million in FY’09).
Sales performance rose on the back of the higher output levels. Overall sales grew 18% to 6.17 million tonnes: there was a 34% rise in long products sales to 2.7 million tonnes and a rise of 8% in flat products sales to 3.47 million tonnes.
Liquid steel production for Q4 FY’10 rose by 32% to 3.7 million tonnes compared to Q4 FY’09 (2.8 million tonnes) as idled capacity in Wales and the Netherlands resumed, but fell 11% compared to Q3 FY’10 (4.2 million tonnes) due to the partial mothballing of TCP in February and production losses on account of planned repairs to the No 7 Blast Furnace at IJmuiden.
HY2FY10 EBITDA rose by more than $1,300 million –to Rs. 2,303 crores (US$ 513 million) compared to an H1 EBITDA loss of Rs. 3,655 crores (U$ 813 million). The improvement was achieved entirely through productivity and efficiency gains, as average selling prices in H2 were slightly down on H1. Key to the improvement was the c. US$ 1,500 million in promised savings delivered during the year through the company-wide cost-saving and restructuring programmes, enabling the company in Q4 to record its first Profit After Tax since the December 2008 quarter (Q3 FY’09).
Company brought back on stream several facilities that had been temporarily taken out of production. This included the Nos 4 and 6 Blast Furnaces at Port Talbot and IJmuiden, the “Queen Bess” Furnace at Scunthorpe and the Llanwern Hot Strip Mill. New operating and productivity records were achieved at Port Talbot.
In contrast, almost a year after four international companies walked away from their 10-year obligation to take 78% of TCP slab, in February 2010 the iron and steel making facilities at TCP were mothballed. Tata Steel Europe thereby halted its exposure to the volatile international merchant slab market and stopped the TCP losses, which accounted for the vast majority of the Company’s overall EBITDA losses for the year. The partial mothballing of TCP has resulted in higher capacity utilisation at other UK facilities, whose costs per unit of production have correspondingly declined. The Company continues to seek a long-term solution for all TCP assets and to welcome approaches from credible strategic partners. To ensure due process is carried out and to maintain momentum following the partial mothballing, Citigroup was engaged in February to manage the TCP process.
NatSteel (Steel Business)
Finished steel production for Q4 FY’10 was 31% higher at 430 k tonnes compared to 329 k tonnes in Q4 FY’09, but 6% lower than in Q3 FY’10 (456 k tonnes).
Finished steel production for Q4 FY’10 was 87% higher at 364 k tonnes compared to Q4 FY’09 (195 k tonnes) and 32% higher than in Q3 FY’10 (275 k tonnes).
In Q1 FY’10 Tata Steel raised Rs. 2,849 crores (US$ 634 million) via term loans and Rs. 2,150 crores (US$ 479 million) via Non-Convertible Debentures. In July 2009 it issued Global Depository Receipts worth US$ 500 million at US$ 7.644 per share.
In November 2009 Tata Steel successfully exchanged US$ 493 million (along with accreted redemption premium) of its existing Convertible Alternative Reference Securities yielding 5.15% pa for new Foreign Currency Convertible Bonds worth US$ 546.94 million yielding 4.5% pa. In Q3 and Q4 Tata Steel prepaid Rs. 2,000 crores (US$ 445 million) of rupee debt and US$ 300 million of foreign currency loans. Tata Steel UK prepaid £100 million in June 2009. A further prepayment of £112.5 million is due in May 2010
The 2.9 million tpa expansion at Jamshedpur is proceeding on schedule and is expected to be commissioned by the end of 2011
Signing of an agreement between Tata Steel and Nippon Steel to set up a 51:49 joint venture to build a 600 k tpa Continuous Annealing & Processing Line at Jamshedpur. This initiative will add value to the cold rolled sheet Tata Steel supplies to the automotive sector in India.