SSAB Sweden may take over Tata Steel Netherland business

by David Fleschen

Tata Steel reports one of the best quarterly financial results in recent times; De-leveraging on track with US$1billion of net debt reduction in the first half of the year; Initiation of talks with SSAB Sweden on potential sale of Tata Steel Netherland business



  • All major sites in India operating close to full capacity utilization.

  • Quarterly deliveries at India1 operations grew 72% Quarter on Quarter and 22% Year on Year.

  • EBITDA from India1 operations surged 4.1x QoQ and 49% YoY to Rs.6,025 crores, driven by higher volumes, improved realizations and cost efficiencies.

  • Tata Steel Standalone EBITDA surged 3.7x QoQ and 33%YoY to Rs.4,718 crores, which translates into an EBITDA per ton of Rs.13,127 and an EBITDA margin of 29%. Key subsidiaries, Tata Steel BSL and Tata Steel Long Products also delivered strong operating performance. Tata Steel BSL generated an EBITDA of Rs.1,113 crores which translates into a EBITDA/t of  Rs.8,735 while Tata Steel Long Products generated an EBITDA of Rs.194 crores which translates into a EBITDA/t of  Rs.10,512.

  • Consolidated EBITDA surged 10.4x QoQ and 60% YoY to Rs.6,217 crores while consolidated PAT from continuing operations increased by 136% QoQ to Rs.1,635 crores.

  • The Free Cash Flow generated during the quarter was Rs.7,832 crores. The company is committed to deleveraging of US$1billion annually and has reduced net debt by Rs.8,197 crores during the quarter.

  • The company has initiated discussions with SSAB (Sweden) based on interest received for the potential acquisition of Tata Steel’s Netherlands business including IJmuiden steelworks. The company has also commenced discussions with the Supervisory Board and Board of Management of Tata Steel Netherlands and the process will move to the next stage including due diligence and stakeholders’ consultations. The company is committed to deploy proceeds of any strategic restructuring towards additional deleveraging of the balance sheet.  

  • The company has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for the Netherlands and UK business in the future. Tata Steel continues its dialogue with the UK Government on potential measures to safeguard the long-term future of Tata Steel UK and is also reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India in the future.

  • Tata Steel is reorganizing its India footprint and folding listed and unlisted subsidiaries into 4 clusters to drive scale, synergies and simplification and to create value for all stakeholders. The business clusters are Long products, Downstream, Mining and Utilities & Infrastructure. Today, the Boards of Tata Steel Long Products, Tata Metaliks and Indian Steel and Wire Products approved the merger of Tata Metaliks and Indian Steel and Wire Products into Tata Steel Long products. The proposed consolidation will create significant synergies and position the company towards future growth in the long products segment. We expect to complete the process in next 6-9 months, subject to necessary regulatory approvals.

Source: Tata Steel, Photo: Fotolia

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