Tata Steel conducted investor conference call today for FY20, key highlights of the same are mentioned below:
1.Crude steel output from India operations up by 8% –The Company showed improved performance and churned out 18.20 mn t of crude steel in FY’20, up by 8% as against 16.81 mn t in the previous fiscal. The ramp-up at TATA Steel BSL and acquisition of the Usha Martin steel business by Tata steel long products (TSLP) attributed to the improved performance. In similar lines, on a quarterly comparison, the same increased by 6% to 4.73 mn t in Q4 FY ’20 as against 4.47 mn t in the preceding quarter.
2.Steel deliveries grew by 4% y-o-y-Steel deliveries from India grew by 4% annually to 16.97 MnT in FY’20 as compared to 16.26 mn t in the previous fiscal. Branded Products & Retail segment deliveries grew by 8% y-o-y in FY20.
However, on a q-o-q basis, the deliveries declined by 17% in Q4 to 4.03 mn t against 4.85 mn t a quarter ago due to the nationwide lock-down in late Mar’20.
3.Tata BSL Steel achieves its best ever crude steel output- On the back of higher capacity utilization and marketing synergies, along with improved maintenance practices, the TATA Steel BSL was capable of clocking its best ever crude steel output. The crude steel output stood at 4.46 mn t and sales at 4.14 mn t while EBIDTA witnessed a monstrous increase by 173% q-o-q to INR 775 cr in Q4.
4.EBITDA dropped by 26% in FY ’20- Tata Steel India EBITDA witnessed a significant decline of 26% to INR 17,650 Cr in FY’20 in contrast with INR 23,934 Cr in FY19. However the same witnessed quarterly increase by 11% in Q4 to INR 4,568 Cr as against INR 4,110 Cr in Q3.
5.Tata steel European operations overview- Company’s liquid steel production declined to 10.26 mn t in FY 20. Meanwhile, deliveries went down by 4% on a yearly basis to 9.29 mn t in FY20 due to limited economic activity.
Implementation of the transformation program to make operations stronger and sustainable. Also engaged with governments across different territories to seek support in terms of loans/grants, reimbursement of manpower cost.
6.Company increased exports to offset dull domestic demand-Towards the end of Mar’20 company shifted its focus to exports amid lock-down in the domestic market. The company mainly exported semis, Hot rolled coils and cold rolled coils to Vietnam, China, and UAE. In FY20, company exported 2.4 mnt steel compared to 1.65 mnt in FY19. The company expects that in Q1 exports will be 50% of its production and the percentage of exports will gradually decline as the domestic sales improve.
7.Coking coal prices are expected to move up in Q1-Coking coal prices are expected to rise with recovery in steel production levels amid a relaxation of lock-down measures in key markets
8.Iron ore prices may soften-Seaborne iron ore prices are buoyed by strong demand from China, however, expected to soften on improving supply.
9.Domestic steel prices expected to rebound– Domestic steel prices are expected to find support with recovery in demand and robust raw material prices since the demand is expected to improve gradually with phased removal of lock-down and increase in government spending. Also, improved demand is expected from the rural pipeline, and select territories where COVID-19 impact is less.
10.Auto contracts under negotiations-Company is negotiating contracts with auto companies which is on a half-yearly basis. Previous contracts were made in Oct’19 which will be renewed and are under negotiation. However, the prices will decline against the second half of last year.
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