New Delhi: The Tata Steel Group today declared its consolidated financial results for the financial year and fourth quarter ended March 31, 2014. There was a marked improvement in profitability as the group’s net profits for the fourth quarter ended March 31, 2014, rose to Rs1,036 crore from Rs503 crore in the previous quarter. Similarly, for the full year ending March 31, 2014, the underlying net profit came in at Rs3,623 crore compared to the underlying profit of Rs332 crore for the year ended March 31, 2013. The improvement in the underlying profitability over the last year was Rs3,290 crore. The improved and steady performance of operations across geographies, despite weak market conditions, led to this significantly improved group performance.
Group performance highlights
Group steel deliveries in FY 2013-14 (FY’14) increased to 26.56 million tonnes from 24.13 million tonnes in FY 2012-13 (FY’13). Deliveries in Q4 FY 2013-14 (Q4 FY’14) increased to 7.62 million tonnes compared to 6.38 million tonnes in Q3 FY 2013-14 (Q3 FY’14) and 6.56 million tonnes in Q4 FY 2012-13 (Q4 FY’13).
Group consolidated turnover in FY’14 was Rs1,48,614 crore versus Rs1,34,712 crore in FY’13. Q4 FY’14 turnover increased to Rs42,428 crore from Rs36,736 crore in Q3 FY’14 and Rs34,650 crore in Q4 FY’13.
FY’14 group EBITDA was Rs16,377 crore compared to Rs12,654 crore in FY’13, implying an improvement of 29 percent. Q4 FY’14 EBITDA increased significantly to Rs4,917 crore from Rs3,921 crore in Q3 FY’14 and Rs4,368 crore in Q4 FY’13.
Group profit after tax (after minority interest and share of profit of associates) in FY’14 swung to Rs3,595 crore versus the loss of Rs7,058 crore in FY’13. FY’14 results included exceptional charges of Rs28 crore compared to the charges of Rs7,390 crore in FY’13. Profit after tax in Q4 FY’14 doubled to Rs1,036 crore compared to Rs503 crore in Q3 FY’14 and was a significant improvement over the loss of Rs6,529 crore in Q4 FY’13. Q4 FY’14 results were affected by exceptional charges of Rs46 crore while the exceptional charges for Q4 FY’13 were Rs7,413 crore.
The group’s basic and diluted earnings per share (EPS) for FY’14 increased to Rs35.19 from the loss of Rs74.54 in FY’13. EPS in Q4 FY’14 came in at Rs10.20 compared to Rs4.73 in Q3 FY’14 and the loss of Rs67.69 in Q4 FY’13.
Cash and cash equivalents as on March 31, 2014, were Rs11,373 crore and net debt was Rs67,326 crore.
The board of directors of the company have recommended a dividend of Rs10 per equity share for the financial year ended March 31, 2014.
Performance of the Indian operations improved significantly despite the weak macroeconomic environment. There were significant achievements in terms of operations and financial performance.
Several steelmaking facilities achieved their highest-ever production in the last year. The rolling facilities of the brownfield expansion at Jamshedpur reached their full capacity in the second half of last year and total steel production was the highest ever. To cater to the increased requirements, the iron ore mines ramped up and produced record quantities. Steel demand in India remained almost flat last year, while customer focus, better products and a vast distribution network helped us to sell 1 million tonnes more over the previous year. Deliveries increased by 14 percent to 8.52 million tonnes in FY’14 from 7.48 million tonnes in FY’13. Q4 FY’14 deliveries increased to 2.41 million tonnes versus 2.07 million tonnes in Q3 FY’14 and 2.28 million tonnes in Q4 FY’13.
Sales of automotive and special products increased by 15 percent in FY’14 despite a ~5 percent decline in the auto market. Sale of branded products, retail and solutions constituted 34 percent of the total sales and increased by 11 percent over the previous year. Sale to industrial products, projects and exports increased by 18 percent over FY’13. Proactive market development has helped in expanding the domestic customer base with exports constituting only 2 percent of total sales in FY’14.
Turnover in FY’14 was Rs41,711 crore compared to Rs38,199 crore in FY’13. Q4 FY’14 turnover increased by 20 percent to Rs12,191 crore from Rs10,143 crore in the previous quarter and Rs10,771 crore in Q4 FY’13. The sequential improvement in revenue was driven by higher volumes and better realisations.
FY’14 EBITDA was Rs13,281 crore, up by 14 percent from Rs11,698 crore in FY’13. Q4 FY’14 EBITDA was Rs4,052 crore, 29 percent higher compared to Rs3,131 crore in Q3 FY’14, and 9 percent higher than Rs3,714 crore in Q4 FY’13. The EBITDA margin increased by 237 basis points in Q4 FY’14 compared to the previous quarter.
Profit after tax in FY’14 was Rs6,412 crore, a 27 percent increase from Rs5,063 crore in FY’13. Q4 FY’14 profit was Rs1,979 crore, 30 percent higher than Rs1,519 crore in Q3 FY’14 and 51 percent higher than Rs1,309 crore in Q4 FY’13.
Basic earnings per share (EPS) in FY’14 increased to Rs64.21 from Rs50.28 in FY’13. EPS in Q4 FY’14 was Rs19.93 compared to Rs15.18 in Q3 FY’14 and Rs13.02 in Q4 FY’13.
The revamped blast furnace in UK together with improved reliability in Europe as a whole led to an increase in volumes compared to the previous year. Financial performance consequently improved, despite average market conditions being worse than in the previous year. Sales volumes also grew, as did the quality profile. The volume of new products sold rose by more than 75 percent in FY’14 compared to the previous year and the company launched 30 new products, as promised.
Progress on improving the product and service portfolio, including success in early vendor involvement initiatives led to the company improving its standing with its customer base which was expressed through numerous customer recognition awards, such as Toyota awarding Tata Steel its certificate of recognition for the company’s contribution in the area of quality.
Liquid steel production in FY’14 increased 16 percent to 15.46 million tonnes from 13.37 million tonnes in FY’13. Q4 FY’14 production of 4.04 million tonnes was 3 percent higher than the 3.91 million tonnes produced in Q3 FY’14 and 26 percent higher than the 3.22 million tonnes produced in Q4 FY’13.
Deliveries increased to 13.86 million tonnes in FY’14, up 6 percent from the 13.07 million tonnes in FY’13. Q4 FY’14 deliveries of 4.07 million tonnes were 27 percent higher than the 3.19 million tonnes in Q3 FY’14 and 19 percent higher than the 3.42 million tonnes in Q4 FY’13.
Turnover in FY’14 was Rs84,666 crore versus Rs78,012 crore in the previous year. Q4 FY’14 turnover was Rs24,376 crore compared to Rs20,709 crore in Q3 FY’14 and Rs19,166 crore in Q4 FY’13.
FY’14 EBITDA almost quadrupled to Rs3,008 crore from Rs764 crore in FY’13. Q4 FY’14 EBITDA of Rs817 crore was down from Rs860 crore in Q3 FY’14, but up from Rs613 crore in Q4 FY’13.
FY’14 EBIT was a loss of Rs158 crore, an improvement on the Rs2,425 crore loss in the previous year. Q4 FY’14 EBIT was a loss of Rs16 crore compared to the loss of Rs2 crore in Q3 FY’14 but an improvement on the loss of Rs213 crore in Q4 FY’13.
South East Asia
The South East Asian operations reported steady performance on the back of operational improvements, cost reduction and restructuring despite severe import pressures in the region and continued political uncertainty in Thailand.
FY’14 deliveries totalled 3.98 million tonnes, a 28 percent increase over the 3.11 million tonnes in FY’13. Q4 FY’14 deliveries were 1.07 million tonnes, slightly lower than 1.09 million tonnes in Q3 FY’14 but 34 percent higher than 0.8 million tonnes in Q4 FY’13.
Turnover in FY’14 increased by 23 percent to Rs16,988 crore compared to Rs13,829 crore in FY’13. Q4 FY’14 turnover was Rs4,365 crore versus Rs4,537 crore in Q3 FY’14 and Rs3,486 crore in Q4 FY’13.
EBITDA declined by 9 percent to Rs439 crore in FY’14 from Rs483 crore in FY’13 due to a severe cost-price squeeze. Q4 FY’14 EBITDA was Rs80 crore, lower than Rs137 crore in Q3 FY’14 and Rs224 crore in Q4 FY’13.