Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Tata Steel plans to focus on improving the performance and cash flows at Tata Steel Netherlands after its talks with SSAB on the acquisition of the IJmuiden plant ended in late January.


The Indian steel conglomerate noted in its earnings report that it had started looking at ways to separate Tata Steel Netherlands and Tata Steel UK after the talks with SSAB ended. In Asia, Tata’s merger with TSBSL and the merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products were also underway.


The company has also restarted work on the pellet plant and cold-rolled mill complex at Tata Steel Kalinganagar, due to strong market conditions, which will help cut costs and improve revenues.


In Q3 FY2021, ending on December 31, 2020, Tata Steel reached its highest consolidated EBITDA and free cash flows due to the operating strength of its business in India along with its efforts towards capital allocation and handling of working capital. 


The steelmaker indicated on Tuesday that all its Indian operating hubs performed well while its main subsidiaries, Tata Steel BSL and Tata Steel Long Products reported record-high profitability.


The global company produced 7.2mn mt of crude steel in October-December 2020, up 3pc from 6.99mn mt in Q3 FY2020. The Indian business produced 4.6mn mt of crude steel in Q3 FY2021 up 2.9pc against 4.47mn mt produced in the prior-year quarter.


Consolidated shipments tallied at 6.88mn mt in Q3 down 5.9pc from 7.31mn mt in the prior year. Deliveries from Indian operations reached 4.65mn mt declining 4.1pc from 4.85mn mt during the same period under review.


The steel producer’s consolidated EBITDA was Rs95.40bn in October-December 2020, up 161pc from Rs36.59bn in the same quarter of FY2020. India’s business reached an EBITDA of Rs88.11bn in Q3 up 114pc from Rs41.11bn in the prior-year period. 


The financial improvement in India was attributed to rising prices, better product mix, lowered exports that comprised less than 11pc of shipments, and improved operating performance.


($ 1 = Rs72.84)


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