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Tata Steel posts Q4 loss at Rs 1,096 crore, operating earnings beat estimates –

Steel maker Tata Steel on June 29 has posted consolidated net loss at Rs 1,095.7 crore for the quarter ended March 2020, which was less than the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 1,300 crore.

The company had reported profit at Rs 2,430.9 crore in March quarter last year.

Consolidated revenue from operations, which was largely in line with estimates, declined 20.4 percent year-on-year to Rs 33,770 crore for the quarter, impacted by lockdown worldwide.

“The COVID-19 outbreak has led to an unprecedented health crisis and has disrupted economic activities and global trade while weighing on consumer sentiment. Consequently, global steel demand is expected to be sharply lower in 2020 before a meaningful recovery in 2021,” Tata Steel said in its BSE filing.

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Consolidated steel production for the quarter increased by 2.2 percent year-on-year to 7.37 million tonnes, but deliveries were down 13.6 percent YoY to 6.50 million tonnes, company said in its BSE filing.

India’s steel production rose by 5.6 percent YoY to 4.73 million tonnes, but deliveries fell 14.6 percent YoY to 4.03 million tonnes in Q4FY20, it added.

The operating performance during the quarter declined but was much ahead of analysts’ estimates. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) fell 38.1 percent to Rs 4,646.9 crore and margin dropped 390 bps to 13.8 percent compared to corresponding quarter of previous fiscal.

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According to a CNBC-TV18 poll estimates, EBITDA was estimated at Rs 3,990 crore with margin at 11.8 percent for the quarter.

Company said with the phased removal of the lockdown restrictions in India, upstream steel making operations have been ramped up and were currently operating at about 80 percent utilization levels.

“In Europe, Tata Steel Europe continues to operate at about 70 percent utilization level. Key steel consuming sectors such as automotive and construction sector continue to be adversely affected, though demand for packaging material has seen a sharp upsurge,” it added.

In the full year FY20, company reported a 73.6 percent decline in profit at Rs 2,719.58 crore and 11.3 percent fall in revenue at Rs 1,39,816.65 crore compared to last year.

India steel production grew 8 percent YoY to 18.20 million tonnes in FY20 with ramp up at Tata Steel BSL and acquisition of Usha Martin’s steel business by Tata Steel Long Products, Tata Steel said, adding deliveries grew 4 percent YoY to 16.97 million tonnes in FY20.

Company said in Europe, liquid steel production marginally declined to 10.26 million tonnes in FY20 and deliveries fell by 4 percent YoY to 9.29 million tonnes in FY20 primarily due to overall weakness in economic activities.

“FY20 has been a challenging year. The Indian economy slowed down in the first half with key steel consuming sectors like automotive contracting sharply. While the economy began recovering in the second half, the outbreak of COVID-19 in end March led to unprecedented disruption and heightened economic uncertainty,” TV Narendran, CEO & Managing Director said.

“While there will be a sharp drop in volumes in Q1FY21, we are seeing early signs of recovery and remain poised to leverage our position on normalization of business conditions,” he added.

Company’s board has given approval for dividend payment of Rs 10 per ordinary share and Rs 2.504 per partly paid ordinary share to the shareholders for the financial year ended March 31, 2020.

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