Tata Steel Netherlands gains productivity gains by increasing production capacity

According to the company's data, total deliveries in the June quarter increased by 7% on a yearly basis and 3% on a quarterly basis to 1.47 million tons. Liquid steel production increased by 80% on a yearly basis to 1.69 million tons. A 14% increase compared to the March quarter showed that the company was able to maximize its production capacity.

Despite a 6% yearly decline in revenues, total revenues increased by 2% on a quarterly basis, reaching USD 1.69 billion. Higher coke and iron ore costs led to an increase in the company's raw material expenses. Inventory changes were also negatively impacted during the quarter, leading to excess inventory.

With operational stabilization, the company's EBITDA turned positive to approximately USD 54 million, despite the losses of last year and the previous quarter. European Union steel spot spreads decreased by more than 10% during the quarter. EU steel demand weakened as the construction and machinery sectors were negatively impacted by high interest rates. Steel imports remained at high levels, resulting in the European Commission's extension of safeguards.

In the UK, Tata Steel's deliveries decreased by 9% on an annual basis, but remained stable at 680,000 tons on a quarterly basis.

Liquid steel production increased by 3% on a quarterly basis to 680,000 tons, despite decreasing by 20% on an annual basis. Revenues were flat at USD 813 million, decreasing 12% on an annualized basis, while higher raw material costs had a negative impact on profitability. Increased purchases of finished and semi-finished products drove raw material costs up by more than 30% and EBITDA loss more than doubled to USD 113,754 million.

Regarding the planned closure of blast furnaces in the UK, Tata Steel's Chief Financial Officer Koushik Chatterjee noted that steel inventories have built up for downstream operations impacting working capital. Chatterjee said that they are on track with the heavy end closure timelines at Port Talbot and are working closely with the UK government to finalize the grant funding process for the new electric arc furnace project. Tata plans to close blast furnace No. 5 at Port Talbot in early July, while BF4 is scheduled to close by the end of September.