“With respect to the UK transition, we are proceeding as per previously announced timelines for the closure of the heavy end, a step which is critical to address the deep cash burn associated with the upstream end of life assets,” said chief financial officer Koushik Chatterjee.
He said while the planned shutdown of these blast furnaces in the UK has led to a build-up of stock for downstream operations and has impacted working capital, the company is prepared for the imports for semi-finished steel which will be used by the downstream assets.
The company has offered its best package of support yet for employees in the UK, while engaging with the unions. It is also working with the newly elected UK government for finalising the grant funding process for the proposed 3-million-tonne electric arc furnace.
While one of the blast furnaces in the UK was shut in early July, the other is scheduled to be shut down in September.Operations in the UK continued to incur losses in the June quarter even at an operational level, with the losses significantly higher as compared to the previous year. In the Netherlands, operations turned positive at an operating level helped by normalisation of operations.At a standalone level, the company’s profit was lower than in the previous year, even as deliveries were higher.Tata Steel produced 8 million tonnes of steel and sold 7.39 million tonnes in the April-Jun period at a consolidated level. Both sales and production were higher than a year ago.
Its consolidated revenue for the June quarter fell 8% year-on-year to Rs 54,771 crore, while operating profit stood at Rs 6,822 crore, up from Rs 6,122 crore a year ago.
“During the quarter, subdued steel demand across most regions weighed on global steel prices,” chief executive TV Narendran said. “In India, steel demand was broadly stable despite some impact due to elections and heat waves.”
Tata Steel spent Rs 3,777 crore as capital expenditure during the quarter, and the phased commissioning of its 5 million tonne additional capacity in Kalinganagar is set to start in September with the kick-starting of the blast furnace.
Tata Steel had a gross debt of Rs 92,961 crore and net debt of Rs 82,162 crore at June-end. It approved an infusion of Rs 6,000 crore in one or more tranches in subsidiary Neelachal Ispat Nigam in this fiscal by subscribing to an equity stake in the company.
This fund infusion will increase Tata Steel’s stake in the company to 99.79%. Neelachal Ispat, meanwhile, will use these funds for redemption of existing non-convertible redeemable preference shares and general corporate purposes.
The company reported its earnings after market hours on Wednesday, and its shares closed at Rs 165.33 apiece on the NSE, up 0.8% from the previous close.
