Tata Steel Posts Highest Ever Consolidated EBITDA In FY 2021-22

As a result of sustained focus on customer relationships, distribution network, Tata Steels has recorded the highest ever consolidated EBITDA of INR 63,830 crore, a growth of 107 per cent, translating into an EBITDA per tonne of INR 21,626 and a healthy EBITDA margin of 26 per cent, the company said in its annual report.

“FY 2021-22 was a pivotal year for the Company. We demonstrated extraordinary resilience, agility and adaptability, which allowed us to record best-ever EBITDA performance despite continued uncertainties. The Company was able to accelerate business restructuring, innovation and growth,” Tata Steel chairman N. Chandrasekaran said.

He said that the growth of the Indian steel industry is likely to remain stable as domestic demand is expected to remain robust and global supply-demand dynamics may present export opportunities.

During the financial year, the company generated free cash flow of INR 27,185 crore and reduced its net debt by 32 per cent to INR 51,049 crore.

Chandrasekaran observed that the ongoing geopolitical conflict, re-imposition of lockdown in China on account of fresh COVID-19 cases, global inflation and continuing supply shortages likely to adversely impact global Gross Domestic Product (GDP) growth in 2022.

He said, “The World Bank expects global growth to decelerate from an estimated 5.5 per cent to 3.2 per cent commodity and energy prices are expected to remain high in the wake of the conflict and sanctions, thereby resulting in an increase in global inflation.”

The company also announced a the highest ever dividend payout.

“On the back of this performance, I am happy to report that the Board of Directors have recommended a dividend of INR 51 per fully paid up equity share and INR 12.75 per partly paid-up equity share of the company, which translates to a highest ever dividend payout of 510 per cent per share. The Board of Directors has also recommended a sub-division of the equity shares in the ratio of 10:1,” he said.

Divulging over the growth of company in the New Material Business, he said, “Tata Steel has the objective to build its business in knowledge and intellectual property intensive and non-cyclical new materials. The Company is exploring Composites, Graphene and Advanced Ceramics as areas of growth.”

During October 2021, In Europe, the company had achieved a complete separation of its UK and Netherlands operations. Under the new structure, Tata Steel UK and Tata Steel Netherlands will operate as two independent companies pursuing separate strategic paths.

“Tata Steel continues to invest significantly in new technologies for digital transformation, with the objective to render a more agile organisation that better responds to changing market dynamics and to make our businesses more resilient,” he said.

Meanwhile, the company continued to accelerate its capex allocation for the six MnTPA Pellet Plant, the 2.2 MnTPA Cold Roll Mill Complex along with the five MnTPA expansion at Kalinganagar. The six MnTPA Pellet plant will be commissioned in Q3 FY23, followed by the Cold Roll Mill Complex and the five MnTPA expansion, which will drive cost savings and product mix enrichment.

The Company has also taken significant strides to adopt efficient clean energy technologies and circular economy projects which underpin our transition to becoming a climate neutral organisation. The most notable project in this area was the commissioning of the five TPD CO2 capture plant at Jamshedpur to extract CO2 directly from blast furnace gas, a first in India by a steel company.

“Our CSR initiatives and outreach activities continued to reflect our endeavour to operate as a socially conscious and responsible organisation which strives to build resilient and empowered communities,” Chandrasekaran said.