Tata Steel has reported a net loss of ₹2,502 crore in the December quarter against a net profit of ₹9,598 crore logged in the same period last year, on the back of lower realisation and higher inventory in Europe.

Overall costs increased to ₹57,172 crore (₹48,666 crore).

EBITDA was down 83 per cent at ₹2,727 crore during the quarter against ₹15,890 crore logged in the same period last year, on margin compression in Europe.

Recession concerns

Sales were up 2 per cent at 7.15 million tonnes (7.01 mt). The company has started production at the recently acquired Neelachal Ispat Nigam unit and it is being ramped up to the rated capacity of around 1 mtpa, it said. Tata Tiscon rebars are being made from billets from the Neelachal unit.

Despite the volatile operating environment, the company increased domestic sales, said TV Narendran, Managing Director.

In Europe, he said recessionary concerns weighed on steel prices, which coupled with elevated energy costs, affected performance. Looking ahead, there is a visible pick up in steel prices across key regions on improved China demand outlook and sustained spending on infrastructure in India, he said.

Subdued prices

Global steel prices witnessed steady moderation amid inflationary pressures and concerns about economic slowdown. In India, steel prices were subdued even as raw material costs moved lower. European operations witnessed margin compression due to lower realisations and elevated input costs.

The company generated a free cash flow of ₹1,588 crore largely due to favourable movement in working capital. The company has spent ₹3,632 crore on capex during the quarter and has begun phased commissioning of 6 mtpa capacity at Kalinganagar.

The work on 2.2 mtpa cold roll mill complex and 5 mtpa expansion is under process, said the company. In Punjab, work has commenced on 0.75 mtpa electric arc furnace, it added.

Gross debt of the company was flat at ₹87,649 crore. It had a cash balance of ₹15,943 crore leading to net debt of ₹71,706 crore.

The British Steel Pension Scheme with Tata Steel UK as sponsor has completed a substantial part of its de-risking journey with 60 per cent of its liabilities insured. The buy-in transaction along with actuarial movements has resulted in a non-cash deferred tax expense of ₹1,783 crore and increased the overall deferred tax expense for the quarter to ₹2,150 crore.