Tata Steel Profits Tumbled 65% in Q1 Fiscal 2020
India steel deliveries were up significantly by 19% year-on-year to 3.96 million tons.
SEATTLE (Scrap Monster): Tata Steel India operations reported sharp year-on-year decline by nearly 65% in consolidated net profit during the first quarter of fiscal 2020 ended June 30, 2019. The decline was mainly attributed to sharp decline in steel prices and higher expenses.
In its latest filing to the Bombay Stock Exchange, the company stated that the consolidated net profits totaled INR 683.13 crore, significantly lower by 64.5% upon comparison with INR 1,922.85 crore in the corresponding quarter last fiscal year.
The steel production by Indian operations surged higher by 23% over the previous year to total 4.50 million tons in 1QFY20. India steel deliveries were up significantly by 19% year-on-year to 3.96 million tons. The consolidated revenue reported notable jump by 13% to INR 21,129 crore, as compared with the year-ago period. The adjusted EBITDA for the quarter was INR 5,117 crore, whereas the adjusted EBITDA margin stood at 24.2%.
The company’s European operations were impacted by planned shutdowns and unplanned outages. The revenue from operations declined to INR 14,495 crore. The Q1 profitability was impacted, mainly on account of operational issues and pressure on steel spreads.
Commenting on the results, T.V. Narendran, CEO and Managing Director, Tata Steel stated that the steel prices across geographies decline during the quarter. The strong business model in India has helped the company to counter the overall market weakness. Meantime, Koushik Chatterjee, Executive Director and CFO noted that the EBITDA per ton in India business jumped higher by 7% over the prior quarter to INR 12,908, despite adverse market conditions.
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