Tuesday, August 14, 2012

TATA STEEL LIMITED - FIRST QUARTER RESULTS - Q1 FY 2013 - deliveries down; turnover flat; Cons.Profit down YoY.


TATA STEEL LIMITED

FIRST QUARTER RESULTS
Q1 FY 2013

Tata Steel has reported Consolidated Financial Results for the quarter ending June 30, 2012

Group Performance Highlights:

 Tata Steel Group’s profit after tax (after minority interest and share of profit of associates)  for Q1 FY’13 was Rs.598 crores (US$107 million) compared to a profit of Rs.433 crores (US$78million) in Q4 FY'12 and  a profit of  Rs.5,347 crores (US$961 million) in Q1 FY’12 (including one-off profits of  Rs.3,362 crores (US$604 million) on sale of investments).

Group EBITDA in Q1 FY’13 was Rs.3,581 crores (US$644 million) compared to Rs.3,419 crores  (US$615 million) in Q4 FY’12 and  Rs.5,071 crores (US$912 million) in Q1 FY’12.

Group consolidated turnover of  Rs.33,821 crores (US$6.08 billion)  in  Q1 FY’13 declined  by 0.5% from  the  Rs.33,999 crores (US$6.11billion) in  Q4 FY’12 but  was  up by  2.5% from  the Rs.33,000 crores (US$5.93 billion) in Q1 FY’12.

 The Group’s steel deliveries declined by 8.7% to 5.68 million tonnes in Q1 FY’13 compared to the 6.22 million tonnes in Q4 FY’12 and by 6.2% from the 6.05 million tonnes in Q1 FY’12.

Net debt at the end of June 2012 increased to Rs.54,020 crores (US$9.71 billion) compared to Rs.47,657 crores (US$8.57 billion) at the end of March 2012.

Turnover at Tata Steel India in Q1 FY’13 was Rs.8,908 crores (US$1.6 billion), down by 6% from the Rs.9,479 crores (US$1.7 billion) in Q4 FY'12 but up by 13.3% from the Rs.7,860 crores (US$1.41 billion) in Q1 FY’12.

EBITDA of Rs.2,791 crores (US$502 million) in Q1 FY’13 was 6.2% lower than the Rs.2,975 crores (US$535 million) in Q4 FY'12 and down by 11.6% from the Rs.3,156 crores (US$567 million) in Q1 FY’12. The EBITDA margin was stable compared to the previous quarter.

Deliveries at 1.59 million tonnes in Q1 FY’13 declined by 10.3% from the 1.77 million tonnes in Q4 FY’12 but remained stable compared to Q1 FY’12.

Turnover at Tata Steel Europe in Q1 FY’13 was Rs.20,406 crores (US$3.67 billion) compared to the Rs.19,923 crores (US$3.58 billion) in Q4 FY'12 and Rs.20,535 crores (US$3.69 billion) in Q1 FY’12. Q1 FY’13 sales declined by  4.9% from Q4 FY'12 and by  15% from Q1 FY’12, as per Tata Steel Europe’s reporting currency.

EBITDA of  Rs.620 crores (US$111 million) in Q1 FY’13 was up from the  Rs.146 crores (US$26 million)  in Q4 FY'12 but  down from the  Rs.1,907 crores (US$343 million) in Q1 FY’12. 

EBITDA margin improved on a sequential basis.

Deliveries declined by 9.5% to 3.21 million tonnes in Q1 FY’13 compared to the 3.55 million tonnes in both Q4 FY’12 and Q1 FY’12.

Turnover at Tata Steel South East Asia in Q1 FY’13 was  Rs.3,372 crores (US$606 million), up by 7% from the Rs.3,152 crores (US$567 million) in Q4 FY'12 and up by 1.2% from the Rs.3,332 crores (US$599 million) in Q1 FY’12.

EBITDA of  Rs.95 crores (US$17 million) in  Q1 FY’13 was  10.5%  lower than the  Rs.106 crores (US$19 million) in Q4 FY'12 but up by 6.1% from the Rs.89 crores (US$16 million) in Q1 FY’12.

The EBITDA margin declined slightly on a sequential basis.

Deliveries declined by 0.8% to 0.72 million tonnes in Q1 FY’13 compared to the 0.73 million tonnes in Q4 FY’12 and by 7.7% from the 0.78 million tonnes in Q1 FY’12.

Consolidated financial results summary

(under Indian GAAP) for the quarter ending 30 June’12

All figures in US$ million, unless specified

HIGHLIGHTS(inUS$ Mns)
Q1FY13
QoQ%Dif
Q4FY12
YoY%Dif
Q1FY12
Steel Deliveries (mnTn)
5.68
-8.68
6.22
-6.12
6.05
Turnover
6,080
-0.52
6,112
2.48
5,933
EBITDA
644
4.72
615
-29.39
912
EBITDAMargin%
10.60%
4.95
10.10%
-31.17
15.40%
Depreciation
235
19.29
197
13.53
207
NetFin.Charges
140
-15.15
165
-4.11
146
Profit Before Taxes
255
20.28
212
-77.9
1,154
PBTMargin%
4.20%
20
3.50%
-78.35
19.40%
Cons.Profit
107
37.18
78
-88.87
961
PATMargin%
1.80%
38.46
1.30%
-88.89
16.20%


For the purposes of converting all financial numbers to US$ for all comparable periods, a US$/ exchange rate of 55.625 has been used throughout this document.

OTHER DETAILS :

During the quarter under review, Tata Steel reported a total expenditure of Rs 31,725.90 crore; Its interest burden is down to Rs 969 crore from Rs 1,012.95 crore in the same period a year ago.

On stand-alone basis (Tata Steel's Indian operations) the company reported a decline of 38.88 per cent in its net profit to Rs 1,356.56 crore in the April-June quarter as compared to Rs 2,219.43 crore of the corresponding quarter of the previous fiscal.Its stand-alone net sales were at Rs 8,820.19 crore, up 13.19 per cent.


Tata Steel Managing Director Mr HM Nerurkar said: “Indian operations posted robust performance against the backdrop of weakening demand and increased competition. Market challenges have made us focus on tightening of costs, improving product-mix and ensuring that the ramp up of our brownfield expansion takes place by the year-end. Downstream linkages of Indian operations are expected to provide the required depth to our  business. South East Asian operations are being strengthened on the back of operational and marketing initiatives, leading to better results.”

Tata Steel Europe MD & CEO Dr Karl-Ulrich K√∂hler said: “Our financial performance continued to improve as raw material cost pressure eased further and strategic cost initiatives yielded further benefits. At Port Talbot, the blast furnace rebuild is progressing on schedule and other operational problems that arose early in 2012 were largely resolved. European steel  demand is lower than expected and prices have weakened. We continue to seek to mitigate the effects of this with tight cost control and emphasis on increased product differentiation.”

Financing Developments:

In April 2012 Non-Convertible Debentures for a tenor of 10 years worth Rs.1,500 crores were issued on a private placement basis.

Corporate Developments:

In July 2012 Tata Steel agreed to sell its 50% stake in Dutch ferrous and non-ferrous metals recycler HKS Scrap Metals Co (HKS) to Euro Scrap Alliance (ESA), a subsidiary of TSR of Germany, in line with Tata Steel’s strategy of focusing on its core activities.

Business Outlook

 Global steel capacity utilisation remains around 80%, implying significant overcapacity and downward pressure on steel prices

 Raw material prices are falling sharply – should help non-integrated steel manufacturers
 Steelmakers are attempting price increases, however falling raw material prices may drag steel prices further

 Chinese steel exports are on the rise as domestic demand falters

 India’s domestic steel demand outlook remains soft however supply issues (mostly with secondary manufacturers) have balanced the situation. Consumption has increased at a healthy rate in the first quarter of the year

 Sovereign debt issues and austerity measures in the Eurozone are hurting consumer sentiment and steel demand

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