Tata Steel (TATASTEEL) Q4 11/12 earnings summary

Executive summary

• FY12 consolidated turnover rose 12% to ₹132,900 crore, while EBITDA fell 21% to ₹13,533 crore and PAT after minority interest and associates declined to ₹5,390 crore from ₹8,983 crore.

• Strong Indian production and sales were offset by pressure in Europe and lower Thailand deliveries; investment continued in Indian capacity, raw-material security and downstream products.

Financial highlights

• Consolidated revenue from operations was ₹132,900 crore versus ₹118,753 crore; PBT was ₹8,585 crore versus ₹12,102 crore, including ₹3,362 crore profit on investment sales and restructuring, impairment and disposal items.

• Consolidated PAT after minority interest and associates was ₹5,390 crore versus ₹8,983 crore; basic EPS was ₹54.28 versus ₹99.03 and diluted EPS ₹53.63 versus ₹92.86.

• Standalone net sales rose 15% to ₹33,933 crore; PAT was ₹6,696 crore versus ₹6,866 crore, with basic EPS of ₹67.84 versus ₹75.63.

• Group operating cash flow increased to ₹11,284 crore from ₹5,512 crore; investing outflow was ₹3,666 crore, including ₹12,136 crore capex, while financing outflow was ₹8,304 crore.

Outlook and guidance

• Jamshedpur’s 2.9 mtpa expansion is targeted for completion in FY13, lifting crude-steel capacity to 9.7 mtpa; Odisha’s 6 mtpa project is planned in two 3 mtpa phases, with the first phase scheduled for 2014 subject to captive mining approvals.

• Global apparent steel consumption was forecast to grow 3.6% in 2012 and 4.5% in 2013; EU demand was expected to contract 1.2% in 2012 and grow 3.3% the following year.

• Indian steel demand was forecast to grow 6.9% in 2012 and 9.4% in 2013; automotive demand, a focus segment, was expected to grow 11–13% in FY13.

• Benga coal and Canada’s Direct Shipping Ore project were expected to begin shipments or production in FY13, supporting raw-material security.