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Tata Steel: Good performance at operating level, however loss continues... - Views on News from Equitymaster
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  • Jun 22, 2016 - Tata Steel: Good performance at operating level, however loss continues...

Tata Steel: Good performance at operating level, however loss continues...
Jun 22, 2016

Tata Steel has announced its fourth quarter results of financial year 2015-2016 (4QFY16). The company has reported a 12.4% decline in the topline while the bottomline was in red in 4QFY16.

Performance summary:
  • Total Income from operations declined by 12.4% YoY due to lower steel realisations across geographies.
  • Operating profit increased by 43% YoY and operating margin stood at 7.5% which has increased by 2.9% during 4QFY15.
  • Other income declined by 7.5% YoY.
  • The Bottomline was in red during the quarter on the back of exceptional items primarily relate to the Voluntary Employee Separation Scheme and non-cash impairment in some of the downstream businesses in Tata Steel Europe and Tata Steel Minerals Canada.
  • The company registered a net loss of Rs 30.5 billion in FY16.

    Consolidated Financial Performance
    (Rs m) 4QFY15 4QFY16 Change FY15 FY16 Change
    Total Income 336,662 295,076 -12.4% 1,395,037 1,171,516 -16.0%
    Total Expenses 321,232 273,023 -15.0% 1,269,680 1,095,659 -13.7%
    Operating profit (EBITDA) 15,430 22,052 42.9% 125,358 75,857 -39.5%
    Operating profit margin (%) 4.6% 7.5% 9.0% 6.5%
    Other income 1,394 1,291 -7.4% 7,962 39,257 393.1%
    Interest 11,952 10,178 -14.8% 48,478 41,286 -14.8%
    Depreciation 15,127 12,319 -18.6% 59,436 50,818 -14.5%
    Profit before tax & exceptional items -10,255 847 25,406 23,008 -9.4%
    Exceptional Item -48,112 -28,578 -39,287 -39,749
    Tax -1,345 5,060 -476.4% 25,674 15,050 -41.4%
    Minority Interest 154 720 367.7% 133 1,089
    Share of profit / (loss) of associates 126 -67 -153.1% 167 207 24.3%
    Net Profit -56,743 -32,138 -39,255 -30,493 -22.3%
    Net profit margin (%) -16.9% -10.9% -2.8% -2.6%
    No. of shares (m) 971
    Basic diluted earnings per share (Rs) ^ -31.40
    P/E ratio (x) * N.A.

    (^annualised, * on trailing twelve month earnings)

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