Tata Steel Q4 net profit at Rs 14,688 crore

Mumbai: Tata Steel has reported consolidated net profit of Rs 14,688.02 crore for the fourth quarter ended March, driven by an "exceptional" gain of Rs 11,376 crore.

It had clocked a net loss of Rs 1,168.02 crore in the same quarter last year.

"The exceptional gain was Rs 11,376 crore, which includes a non-cash gain of Rs 14077 crore on account of restructuring of UK pension scheme in the March quarter," the company said in a release.

The total income of the company increased to Rs 36,407.19 crore in the quarter, against Rs 35,457.06 crore in the year-ago period.

The total expenses stood at Rs 32,626.42 crore, compared with Rs 31,132.02 crore.

For financial year 2017-18, the steel maker reported a net profit of Rs 17,763 crore, against a loss of Rs 4,169 crore in the previous fiscal.

T V Narendran, chief executive officer and managing director, Tata Steel, attributed the robust performance in FY18 on strong execution strategy, supported by favourable global demand-supply balance.

"During the year, our Indian operations delivered volume growth better than the market on the back of the ramp-up at our Kalinganagar plant and the strength of our marketing network and brand equity," he said.

Narendran said growth was broad-based across marketing segments and added that Tata Steel Europe had a good quarter despite currency headwinds.

"The UK pension scheme restructuring process has also been completed. The 50:50 JV discussion with Thyssunkrupp is progressing well and we are committed towards building a strong European portfolio," he said.

He added that the company continues to execute its strategy of expanding footprint in India.

"Kalinganagar Phase 2 expansion is progressing well, which will take our capacity from 13 million tonnes (mt) to 18 mt of crude steel. I am also happy to share that NCLT has given its approval on our resolution plan for Bhushan Steel. We have also received CCI approval for this," he said.

On the steel outlook, he said the company is closely watching the developments in global steel trade because of the protectionist measures by the US and added, "However, we continue to be bullish on steel prices and spreads with improving demand situation in India."

Koushik Chatterjee, executive director and chief financial officer, said FY18 has been a good year for the company and the group delivered a strong top and bottomline growth.

"We completed two large financing transactions, which apart from providing funds also gives us significant flexibility to pursue our growth plans. Our USD 1.3 billion international bond issue in January 2018 helped us extend our maturity profile. We also successfully completed a USD 2 billion rights issue, one of the largest equity issuance in India," he said.

The capex for the last year was Rs 7,500 crore, he said, adding that the company is looking at a couple of thousand crores more, indicating that the capex could be in the range of Rs 9,000-9,500 crore.

Kaushik said that the company has completed the due diligence process in the Thyssunkrupp deal, adding that, "we are just now working on definitive agreements, and should look at it (completion) in the first half of the year".

The expansion work on the Kalinganagar plant has began which is expected to be completed at a total estimated cost of Rs 23,500 crore, the company said.

Tata Steel Europe is seeking buyers for five non-core business units, which supply products to niche markets.

"These potential divestments will allow Tata Steel Europe to strengthen its focus on strategic strip products and markets through its IJmuiden and Port Talbot value chains," the release said.

The company's shares closed at Rs 622.05 apiece on the BSE, down 0.32 percent on the BSE today, against a 0.44 percent decline in the benchmark.