Tata Steel reports the highest ever consolidated quarterly EBITDA

Mumbai: The Board of Directors of Tata Steel Limited at its meeting held today, i.e., February 9, 2021, approved the Financial Results of the Company for the quarter and nine months ended December 31, 2020.

The Company’s consolidated Profit after tax in 3Q FY21 improved 4.3 times to Rs.4,011 crores as compared to 3Q FY20. Consolidated EBITDA increased 2.6 times YoY to Rs.9,540 crores with improved realisation across key entities.

Consolidated Free Cash Flow was Rs.12,078 crores during 3QFY21 and Rs.20,588 crores in the first nine months of the current financial year driven by strong operating performance, disciplined capital expenditure and working capital management. The Company continues to prioritise on capital expenditure; it spent Rs.1,394 crores on capex during the quarter. The Company has decided to restart work on Pellet plant and Cold Roll Mill complex at Tata Steel Kalinganagar. Both the Pellet plant and Cold Roll Mill complex, once completed, will expand margin.

T. V. Narendran, CEO & Managing Director, said: “The recovery in the global and Indian economy has led to sharp improvement in steel demand in India. We pivoted our deliveries to domestic markets, to cater to the requirements of our local customers by reducing exports. All the segments, especially automotive, have performed extremely well supported by our continuous focus on strong customer relationships, superior distribution network, brands and new product developments. We are also making good progress on our various initiatives to de-risk the business while our digital marketing platforms are helping us reach new markets and be future ready. The investments in infrastructure and recent policy developments, to drive economic growth, should drive steel demand in India.”

“Given strong market conditions and our success with deleveraging, we have restarted work on the pellet plant and the CRM complex at Kalinganagar which will help in reducing costs and improving revenues,” he added.

As part of the enterprise deleveraging plan, Tata Steel has completed reduction of net debt by Rs.18,609 crores in the first nine months of the current financial year. During the third quarter, the company reduced the leverage by Rs.10,325 crores. As part of the continued de-leveraging strategy further deleveraging is being undertaken in 4QFY21.
Koushik Chatterjee, Executive Director and CFO, said: “Continuing with the recovery from the deep impact of the pandemic in the first quarter of the financial year, Tata Steel has delivered one of the best financial performance during this quarter with the highest ever consolidated EBITDA of Rs.9,540 crores and free cash flows of over Rs 12,000 crores on the back of strong underlying operating performance of the India business, sharp focus on capital allocation and working capital management. All our operating hubs in India have performed exceptionally well with the standalone EBIDTA margin at 37.5%. Our key subsidiaries Tata Steel BSL and Tata Steel Long Products have also reported the highest ever profitability in recent years.”

“Our enterprise strategy on debt management continues to be on target. After reduction in net debt by Rs.8,285 crores in the first half which surpassed our annual de-leveraging target of $1 billion, we continued to aggressively reduce our net debt by Rs.10,325 crores and gross debt by Rs.5,640 crores during the quarter, taking the nine month reduction in net debt by Rs.18,609 crores and gross debt by Rs.7,649 crores. This has significantly improved the credit metrics of the company. Our cash flow generation remains strong and in addition to the de-leveraging in the first nine months, we will further reduce the gross debt by more than Rs 12,000 crores in the fourth quarter of the current financial year. We have restarted allocating capital on margin expansionary growth projects in India within the contours of the targeted financial framework,” he added.

TSBSL merger with Tata Steel is progressing ahead. The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products in also underway.