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  • Tata Steel Group reports Consolidated Financial Results for the Financial Year ended March 31, 2013

    23 May 2013 | Corporate News

    Tata Steel Group (“the Group”) today declared its Consolidated Financial Results for the quarter and for the Financial Year ended March 31, 2013.

    Group Performance Highlights:

    The Indian operations recorded robust underlying performance on the back of the ramp-up of its 2.9mtpa expansion, despite weak markets.

    • Deliveries totalled 7.48 million tonnes in the financial year 2012-13 (FY’13) compared to 6.63 million tonnes in the financial year 2011-12 (FY’12), an increase of 12.8%. Q4 FY’13 deliveries were 2.28 million tonnes compared to 1.89 million tonnes in Q3 FY’13, an increase of 20.8% and 1.77 million tonnes in Q4 FY’12, an increase of 28.9%.
    • The turnover recorded for FY’13 was Rs.38,199 crores compared to Rs.33,933 crores in FY’12, an 12.6% increase year-on-year. Turnover in Q4 FY’13 was Rs.10,771 crores compared to Rs.9,370 crores in Q3 FY’13 and Rs.9,479 crores in Q4 FY’12.
    • EBITDA for FY’13 was Rs.11,698 crores compared to Rs.11,559 crores in FY’12. Q4 FY’13 EBITDA was Rs.3,714 crores compared to Rs.2,525 crores in Q3 FY’13 and Rs.2,975 crores in Q4 FY’12. Profit before tax of Rs.7,837 crores in FY’13 compared to Rs.9,857 crores in FY’12.
    • The profit before tax for FY’13, before exceptional items, was Rs.8,511 crores, compared to the Rs.9,346 crores of FY’12. The profit before tax in Q4 FY’13, before exceptional items, was Rs.2,859 crores, an increase of Rs.1,240 crores over Q3 FY’13.
    • Profit before tax in Q4 FY’13 was Rs.2,174 crores compared to Rs.1,619 crores in Q3 FY’13 and Rs.2,371 crores in Q4 FY’12.

    The European operations recorded an improvement in underlying performance on the back of increase in volumes in the quarter ended March 31, 2013.

    • Deliveries totalled 13.07 million tonnes in FY’13 compared to 14.02 million tonnes in FY’12, a drop of 6.8% largely on account of repairs and outages at the operations. However, with the relighting of the Blast Furnace at Port Talbot in February, there was an increase in production and deliveries in Q4 FY’13. Q4 FY’13 deliveries increased to 3.42 million tonnes compared to 3.02 million tonnes in Q3 FY’13 and 3.55 million tonnes in Q4 FY’12.
    • In FY’13, the turnover was Rs.78,012 crores and the EBITDA was Rs.764 crores compared to the turnover of Rs.82,153 crores and EBITDA of Rs.1,777 crores in FY’12. However, the FY’12 EBITDA included one-time gains of Rs.1,380 crores, excluding which the underlying EBITDA for FY12 works out to Rs.397 crores. In effect, the underlying EBITDA for FY13 has increased by Rs.326 crore over the underlying EBITDA for FY12.
    • Q4 FY’13 turnover was Rs.19,166 crores compared to the Q3 FY’13 turnover of Rs.18,126 crores and Rs.19,923 crores in Q4 FY’12.
    • Q4 FY’13 EBITDA was Rs.613 crores compared to the Q3 FY’13 EBITDA loss of Rs.428 crores, an increase of Rs.1,041 crores and an increase of Rs.467 crores over the EBITDA in Q4 FY’12 of Rs.146 crores.

     

    The South East Asian operations’ restructured its operations in Australia and China to turnaround its performance.

    • Deliveries totalled 3.11 million tonnes in FY’13 compared to 2.95 million tonnes in FY’12. Q4 FY’13 deliveries were 0.8 million tonnes compared to 0.82 million tonnes in Q3 FY’13 and 0.73 million tonnes in Q4 FY’12.
    • FY’13 turnover was Rs.13,829 crores and EBITDA was Rs.483 crores compared to the turnover of Rs.12,710 crores and EBITDA of Rs.213 crores in FY’12, increase of Rs.1,119 crores and Rs.270 crores respectively.
    • Q4 FY’13 turnover was Rs.3,486 crores compared to the Q3 FY’13 turnover of Rs.3,465 crores and Rs.3,152 crores in Q4 FY’12.
    • Despite flat turnover, the Q4 FY’13 EBITDA increased to Rs.224 crores as compared to the Q3 FY’13 EBITDA of Rs.144 crores. It has also increased by Rs.118 crores, over the Q4FY12 EBITDA of Rs.106 crores.

    The Group recorded robust performance for the quarter on the back of an increase in volumes in Q4 FY’13.

    • Groups steel deliveries in FY’13 totalled 24.13 million tonnes compared to 24.22 million tonnes in FY’12. Deliveries in Q4 FY’13 were 6.56 million tonnes versus 5.83 million tonnes in Q3 FY’13, an increase of 12.6% q-o-q and 6.22 million tonnes in Q4 FY’12, an increase of 5.6% y-o-y.
    • Group consolidated turnover was Rs.1,34,712 crores in FY’13 compared to Rs.1,32,900 crores in FY’12. Q4 FY’13 turnover was Rs.34,650 crores compared to Rs.32,107 crores in Q3 FY’13 and Rs.33,999 crores in Q4 FY’12.
    • Group EBITDA in FY’13 was Rs.12,654 crores compared to Rs.13,533 crores in FY’12. EBITDA in Q4 FY’13 was Rs.4,368 crores compared to Rs.2,252 crores in Q3 FY’13 and Rs.3,419 crores in Q4 FY’12.
    • Group profit before tax and exceptional items for FY13 was Rs.3,257 crores compared to the Rs.5,223 crores of FY12. For the Q4 FY13, the group profit before tax and exceptional items was Rs.1,837 crores, an increase of Rs.2,037 crores over the loss in Q3 FY13 and increase of Rs.657 crores over Q4FY12.
    • The Group also monetised its portfolio by selling part of its stake in Titan Industries Ltd to realise profits of Rs.962 crores in FY’13.
    • The Eurozone crisis has pushed regional economies in Europe and UK into a recession and the current steel demand is almost 30% lower than the pre-2008 financial crisis level. These severely depressed conditions are expected to continue over the short-to-medium term and have led to a downward revision of cashflow expectations and the valuation of the Groups’ European operations. Reflecting these conditions, the Group took an impairment charge of Rs.8,356 crores in Q4 FY’13. This is a non-cash charge and does not affect any of its financial covenants and its funding position. A significant portion of this impairment charge relates partly to the goodwill created on the acquisition of Corus Group plc in 2007 and partly to the assets of the business units that have been adversely affected by the severe contraction in demand, especially in the construction sector. The balance impairment relates to the assets in Tata Steel KZN in South Africa, Tata Steel Thailand and Tata Metaliks for Redi Plant.
    • Group Profit After Tax (after minority interest and share of profit of associates) for FY’13 was a loss of Rs.7,058 crores compared to the profit of Rs.5,390 crores in the previous year (FY’12), primarily due to the non-cash impairment charge of Rs.8,356 crores detailed above. The Group recorded a loss of Rs.6,529 crores in Q4 FY’13 for the same reason.  This compares to the loss of Rs.763 crores in Q3 FY’13 and the profit of Rs.433 crores in Q4 FY’12.

    Tata Steel Group has undertaken a series of initiatives to expand its business and deliver value to all its stakeholders. 

    In India, the Group successfully implemented its 3mtpa brownfield expansion at Jamshedpur which increased its total capacity to 10mtpa. Full ramp up of the capacity was achieved in March 2013. An incremental 1 million tonnes of steel was produced during the year, taking the total production to 7.94 million tonnes. The Group is now embarking on its next phase of growth and is setting up a 6mtpa greenfield steel project in Odisha.  A new subsidiary, Tata Steel Odisha Ltd., has been set up specifically for this project. The project will be implemented in 2 phases of 3mtpa each.

    • In Europe, the Group has invested over £1 billion in the last 3 years towards improving the structural competitiveness of the business including £220m in rebuilding blast furnace no. 4 at Port Talbot, which was the largest industrial engineering project in the UK in the recent past.   It continues to implement a series of initiatives to enhance competitiveness by cutting costs, increasing operational efficiency, improving product mix, and restructuring its asset portfolio. Tata Steel is also investing in developing and training people at the Tata Steel Academy and has taken on board around 500 apprentices in the UK in the last couple of years, of which 122 were taken on during the year. The Company is working closely with the UK government on a number of key issues to improve the competitiveness of the manufacturing industry in the UK.
    • The Group has decided that it will not proceed with its greenfield steel project in Vietnam in the near future.

    During FY’13, Tata Steel Group raised Rs.31,799 crores of debt from various banks and financial markets taking its Gross Debt to Rs.66,074 crores. 

    • An amount of Rs.15,472 crores was incurred on capital expenditure and Rs.27,099 crores was utilised towards repayment of principal obligations.
    • The closing cash and cash equivalents as of March 31, 2013was Rs.10,652 crores
    • The Net debt was Rs.55,421 crores versus Rs.47,657 crores at the end of March 2012.

    Tata Steel Group has also secured above Rs.24,000 crores through significant financing deals in April and May 2013 :

    • The Group was able to successfully negotiate financial closure for its 6mtpa Kalinga Project. Rs.22,800 crores of project financing was tied up for with a consortium of 21 banks and financial institutions. This will meet the funding requirement of both the phases of the project.
    • In April 2013, Sing$300 million was raised through a 10 year bond at a yield of 4.95%. This is the largest and longest dated Sing$ bond transaction ever achieved for a private sector Indian company and successfully established a strong pricing benchmark in the international bond markets.

    The Board of Directors of the Company has recommended a dividend of Rs.8 per equity share for the financial year ended March 2013.

    Financial Performance Analysis:

    Consolidated financial results summary (under Indian GAAP) for the year ended 31 March 2013

    All figures in Rs. Crore, unless specified

    FY'13

    FY'12

    HIGHLIGHTS

    Q4 FY'13

    Q3 FY'13

    Q4 FY'12

    24.13

    24.22

    Steel Deliveries (Mn tons)

    6.56

    5.83

    6.22

    1,34,712

    1,32,900

    Turnover

    34,650

    32,107

    33,999

    12,654

    13,533

    EBITDA

    4,368

    2,252

    3,419

    9.4%

    10.2%

    EBITDA Margin

    12.6%

    7.0%

    10.1%

    5,575

    4,517

    Depreciation

    1,470

    1,463

    1,093

    3,517

    3,352

    Net Finance Charges

    913

    964

    915

    3,257

    5,223

    PBT (before exceptional items)

         1,837

         -200

    1,180

    2.4%

    3.9%

    PBT Margin (before exceptional items)

          5.3%

        -0.6%

    3.5%

    -4,133

    8,585

    PBT (after exceptional items)    -5,576       -220

    1,180

    -3.1%

    6.5%

    PBT Margin (after exceptional items)    -16.1%      -0.7%

    3.5%

    -7,058

    5,390

    Profit after Taxes, Minority Interest and Share of Associates -6,529      -763

          433

    -5.2%

    4.1%

    PAT Margin -18.8%     -2.4%

    1.3%

    Executive Comment

    Tata Steel Managing Director Mr HM Nerurkar said: “Despite the weakening market conditions in the last year, the Indian operations posted a strong growth in production and deliveries. Our investment over the years in customer relationship building, developing distribution chain, undertaking market research and retail focus paid dividend through the significant sequential increase in deliveries in the last quarter. I convey my heartiest congratulations to all the employees for achieving this commendable performance. The brownfield expansion is now fully ramped up and we are committed to commissioning the greenfield plant in Odisha on schedule. The South East Asian operations have performed well with improving demand, product differentiation, efficiency improvement and restructuring measures.”

    Tata Steel Europe MD & CEO Dr Karl-Ulrich Köhler said: “Europe’s economic deterioration last year reversed the modest recovery in European steel demand that had been going on since 2009 and our deliveries fell as a consequence. We acted decisively in response to the renewed downturn by focusing intensely on costs and cash flow management. We took £200 million of fixed cost out of the business and reduced our steel stocks to record lows by year-end. We also acted to restructure our support functions and asset base. But we did not allow the downturn to divert us from our longer-term objective of building an all-weather business. We invested significantly in improvements to our operational base and we made substantial progress in strengthening our long-term relationships with end customers in our chosen sectors. And we increased the proportion of high-value, differentiated products and services in our sales, which have risen by almost 20% in the last two years. These improvements have given us a firmer foundation as we enter another tough year of subdued steel demand in Europe.”

    Disclaimer

    Statements in this press release describing the Groups’ performance may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Group’s operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Group operates, changes in Government regulations, tax laws and other statutes and incidental factors.

    For investor enquiries contact:

    Samita Shah
    Tel: +91 22 6665 7371
    email: samita.shah@tatasteel.com 

    Subhra Kanti Das
    Tel: +91 22 6665 7382
    email: subhra.das@tatasteel.com

    For media enquiries contact:

    Prabhat Sharma
    Tel: +91 92345 10689
    email: prabhat.sharma@tatasteel.com

    Bob Jones
    Tel: +44 207 717 4532
    email: bob.jones@tatasteel.com

    * US$/INR conversion rate of 54.275 can be used to convert the rupee figures.