Tata Steel Q2 Profit More Than Triples Year Over Year
15 Nov 2018
Tata Steel reported profit after tax (PAT) of USD $430.8 million in the quarter, more than triple that of Q2 2017, when it hit USD $140.7 million.
“Tata Steel Group has delivered extremely strong results this quarter driven by robust operational performance and favorable business conditions in India,” CEO and Managing Director T.V. Narendran said in a release. “This quarter, despite a seasonally weaker period, we sold 4.32 million tons across Tata Steel Standalone and Bhushan Steel. This demonstrates our strong customer relationships and the strength of our marketing franchise.
“We continue to work on our strategy of increasing our Indian footprint as we ramp up operations at Bhushan Steel and implement our 5 mtpa expansion at Tata Steel Kalinganagar.”
In May, Tata announced the acquisition of a 72.65% stake in Bhushan Steel via India’s Corporate Insolvency Resolution Process. According to the quarterly earnings report, Bhushan’s deliveries jumped 34% quarter over quarter, up to 1.14 million tons, with Tata citing “improved marketing strategy” in reduction of inventory.
“The integration of Bhushan Steel is progressing well; our focus is on improving maintenance and safety practices at the plants which will improve plant reliability and help ramp up volumes,” the earnings release states.
Earlier this week, MetalMiner’s Sohrab Darabshaw reported on Tata’s efforts toward unifying its brand amid its acquisitions, which this year also included Usha Martin, a producer of steel wire rope based in Kolkata.
“Tata Steel signed definitive agreement to acquire Usha Martin Limited’s steel business comprising 1 MTPA long products manufacturing capacity, an operating iron-ore mine, an underdevelopment thermal coal mine and captive power plants,” Tata’s earnings release states. “This acquisition provides a rich basket of long products comprising wire rods, specialty bars, and blooms. Tata Sponge Iron Limited, a subsidiary of Tata Steel, is carrying out this acquisition.”
In other developments, Tata’s planned joint venture in Europe with German firm Thyssenkrupp is under review by Europe’s competition authorities, as MetalMiner’s Lisa Reisman noted.
In a release, the European Commission stated it is analyzing concerns that the merger “may reduce competition in the supply of various high-end steels.” The release makes specific mention of automotive steel, metallic coated steel for packaging and grain-oriented electrical steel.
“Steel is a crucial input for many of the goods we use in our everyday life, and competitive steel prices are vital for the European economy,” Commissioner Margrethe Vestager said in the prepared statement. “Industries dependent on steel employ over 30 million people in Europe and we must be able to compete in global markets. This is why we will carefully investigate the impact of the planned combination of Tata Steel’s and ThyssenKrupp’s steel businesses on effective competition in the steel markets.”
The European Commission has until March 19, 2019, to make a decision with respect to competition concerns stemming from the merger.
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