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Tata Steel swings to Q4'18 profit on pensions gain; production, sales down YOY

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Tata Steel swings to Q4'18 profit on pensions gain; production, sales down YOY

Tata Steel Ltd. swung to a profit of 146.88 billion Indian rupees, or 96.84 rupees per share, in its fiscal fourth quarter from a year-ago loss of 11.68 billion rupees, or 11.84 rupees per share, driven in part by a one-off pensions gain.

The Indian steelmaker said May 16 that the restructuring of its U.K. pension scheme is now complete and resulted in an exceptional gain during the quarter of 113.76 billion rupees, including a noncash gain of 140.77 billion rupees.

Consolidated revenues, meanwhile, increased by 8% year over year to 361.32 billion rupees from 353.05 billion rupees, helped by improved selling prices across geographies and increased European deliveries. EBITDA fell to 65.79 billion rupees from 69.82 billion rupees in the fourth quarter of fiscal 2017.

Tata produced 6.3 million tonnes of steel and delivered 6.4 million tonnes of steel during the three-month period, decreasing from 6.4 million tonnes of production and 6.8 million tonnes of deliveries recorded in the prior-year period.

The company previously reported that output and sales from its Indian operations were affected by an unexpected breakdown of the blast furnace at its Kalinganagar facility.

For the full year, the company's consolidated profit came in at 177.63 billion rupees, compared to a loss of 41.69 billion rupees for fiscal 2017. Revenues were also higher, increasing to 1.330 trillion rupees from 1.174 trillion rupees year over year, while EBITDA increased 29.5% to 220.45 billion rupees.

Steel production and sales also increased year over year, to 25.4 million tonnes and 25.3 million tonnes, respectively, from 24.5 million tonnes and 23.9 million tonnes.

Tata's gross debt increased to 921.47 billion rupees as of March 31, primarily driven by foreign exchange effects, while net debt fell to 692.15 billion rupees.

The group's board recommended a dividend of 10 rupees per fully paid equity share and 2.504 rupees per partly paid equity share.

With regards to the planned merger of Tata's European arm with ThyssenKrupp AG, the company said discussions are progressing well and binding agreements are expected to be signed in the first quarter of fiscal 2019.

As of May 15, US$1 was equivalent to 68.27 Indian rupees.