MOSL: ANNUAL REPORT THREADBARE (ART) | TATA STEEL FY18: Cash flows muted despite improved operating performance
ANNUAL REPORT THREADBARE (ART) | TATA STEEL FY18: Cash flows muted despite improved operating performance
Tata Steel’s FY18 annual report analysis highlights improved operating performance, with EBITDA increasing 29% to INR218.9b, primarily led by standalone operations. Restructuring of pension scheme led to an exceptional gain of INR138.5b (66% of PBT) and overfunded status of INR194.1b. However, consolidated operating cash flow declined to INR80.2b (FY17: INR108.2b) due to pension settlement payout of ~INR46.7b and increase in standalone cash conversion cycle from 19 days to 41 days. Adjusted for the settlement payment, EBITDA-CFO conversion remained muted at 71% (FY17: 75%). Consolidated adjusted (to forex impact) gross debt increased to INR915.5b (FY17: INR882.9b) due to increased indebtedness of subsidiaries, while adjusted net debt declined to INR687b (FY17: INR776.9b), aided by rights issue of INR91b. Impairment losses, primarily in Canada mining business, were INR11.6b, 10.2% of PBT before exceptional items. Contingent liability increased to INR139.8b, 23% of net worth (FY17: INR121b, 34% of NW) due to demand raised by authorities for excess production.
Subsidiaries’ margins muted despite higher realizations: Consolidated revenue grew 13.3% to INR1,330.2b (FY17: INR1,174.2b) aided by increased realization. While standalone EBITDA margin expanded 400bp to 25%, weak operating performance at subsidiaries (derived EBITDA margin flat at 8%) contained consolidated EBITDA margin – up 200bp to 16%.
Tata Steel is primarily engaged in the manufacturing of steel and its related products. Through its joint ventures, Co. is also engaged in iron ore and coal exploration and mining activities. Co.'s products include hot and cold rolled coils and sheets, galvanized sheets, tubes, wire rods, construction rebars and bearings. Co.'s products are sold under the following brand names: Tata Steelium, Tata Shaktee, Tata Tiscon, Tata Bearings, Tata Agrico, Tata Wiron, Tata Pipes and Tata Structura. Apart from these product brands, Co. also has in its folds a service brand called "steeljunction".
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.