Tata Steel posted consolidated revenue of Rs232.9bn and EBITDA of -Rs299mn compared to MS estimates of Rs260bn and Rs521mn, respectively, and F4Q09 numbers of Rs264bn and Rs328mn, respectively. We note that reported Teeside EBIT loss of Rs2.44bn was higher than our expectation of Rs1bn. Adjusted for the loss, results were ahead of expectation.
Ex-India business losses at the net level were down sequentially from Rs54bn to Rs30bn this quarter. At the EBITDA level as well the loss slipped just 8% QoQ to -Rs17.1bn. We find this a credible performance due to adverse steel price trends that Corus faced in the quarter, just a 57% capacity utilization in Europe and high raw materials costs due to the impact of old inventories.
This should be driven by full reflection of improving steel prices, higher capacity utilization, and full impact of lower raw material costs.