India-headquartered steel giant Tata Steel Group has announced its group financial results, including Tata Steel Europe, for the first quarter ended June 30 of the financial year 2020-21.
Accordingly, Tata Steel Group recorded a net loss of INR 46.09 billion ($616.13 million) in the first quarter, compared to a net profit of INR 6.95 billion in the corresponding period of the previous financial year. The group's first quarter sales revenues amounted to INR 242.8 billion ($3.24 billion), decreasing by 32.4 percent year on year. The group’s EBITDA totaled INR 5.97 billion ($79.8 million) in the given quarter, falling by 89 percent year on year.
In the first quarter of the financial year 2020-21, Tata Steel Group’s consolidated steel deliveries amounted to 4.93 million mt, down 22.2 percent, while its total production amounted to 5.14 million mt, falling by 28 percent, both year on year.
Tata Steel CEO and managing director T V Narendran said, “Economic activity is gradually recovering. In India, we have ramped up our capacity utilizations to 90 percent levels with total sales in June exceeding FY20 average monthly sales. We are further ramping up capacity utilization and increasing domestic sales, which will lead to an improvement in our margins in coming quarters.” He also added that the company has recalibrated its operations in line with the evolving business environment and is focused on conserving cash and on liquidity management.
According to Tata Steel, global steel demand will improve gradually as economic activity recovers with relaxation in restrictions, but will remain lower on year-on-year basis in 2020. India’s steel demand is also expected to improve further, supported by government spending on infrastructure and stronger rural demand after the monsoon season. Steel demand recovery in the EU is slower, so overall demand is forecast to decline by about 16 percent in 2020. Domestic steel prices are expected to improve with the recovery in steel demand, while seaborne iron ore prices are expected to remain elevated with strong demand from China.
