Companies

Tata Steel Q2 net halves on higher costs

Our Bureau. Mumbai | Updated on November 13, 2020

TV Narendran, CEO and MD, Tata Steel. - Kamal Narang

Rejigs India operations; to divest Dutch unit & make UK operations self-sustaining

Tata Steel reported that its net profit in the September quarter had halved to ₹1,665 crore from ₹3,302 crore in the same period last year on a rise in the cost of operations.

Income was up 7 per cent at ₹37,154 crore (₹34,763 crore). Overall expenses during the quarter went up at ₹35,245 crore (₹34,758 crore).

However, the company did better in the reporting period compared to the ₹4,648-crore loss in the June quarter on revenues of ₹24,289 crore.

The company has initiated discussions with SSAB Sweden for the potential acquisition of Tata Steel’s Netherlands business including Ijmuiden Steelworks. It has also commenced discussions with the Supervisory Board and Board of Management of Tata Steel Netherlands and the process will move to the next stage including due diligence and stakeholder consultations, said Tata Steel in a statement on Friday.

The company has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK to pursue separate strategic paths for the Dutch and British businesses.

Tata Steel said its dialogue with the UK government on potential measures to safeguard the long-term future of its UK arm is on, and the company is also reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India.

Business clusters

Further, the company is reorganising its India footprint and rolling listed and unlisted subsidiaries into four clusters to drive scale, synergies and simplification to create value for all stakeholders.

The business clusters are long products, downstream, mining and utilities, and infrastructure. Today, the boards of Tata Steel Long Products, Tata Metaliks and Indian Steel and Wire Products approved the merger of the latter two with Tata Steel Long products.

TV Narendran, CEO & MD, said: “Tata Steel has delivered strong results in India with broad-based, market leading volume growth and strong cashflow generation. The company has ramped up capacity utilisation to normal levels and achieve highest ever sales on reduced cost despite the ongoing challenges due to the Covid pandemic.”

Published on November 13, 2020

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