Economy

Port Talbot steelmaker makes first pre-tax revenue in 13 years | Tata

Port Talbot steelmaker makes first pre-tax revenue in 13 years |  Tata
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Port Talbot steelmaker makes first pre-tax revenue in 13 years |  Tata

The proprietor of the Port Talbot steelworks in south Wales posted its first pre-tax revenue in 13 years due to report metal costs and a restoration in demand throughout Europe as pandemic restrictions eased.

Tata Metal UK ( TSUK ) reported a pre-tax revenue of £82m for the yr to the top of March, an enchancment on losses of £347m and £654m within the earlier two years.

The corporate, which mentioned it was nonetheless in talks with the UK authorities about capital funding to modify to inexperienced metal, posted a 58% rise in annual income – from £1.97bn to £3.1bn.

Britain’s largest steelmaker mentioned the rise was pushed by a 53% enhance in common earnings per tonne of metal, with costs rising to report ranges because the begin of the pandemic, in addition to a 3% rise in deliveries.

“This enchancment is attributable to the restoration of the European metal market from the weakened market circumstances attributable to the Covid-19 pandemic final yr,” the corporate mentioned in its annual monetary outcomes.

Nevertheless, TSUK, which derives 59% of its complete income from the UK and round 37% from wider Europe, has warned that the return to profitability continues to be pushed by rising prices, with vitality costs “considerably greater” within the second half of its monetary yr. went up”. Whole working bills rose from £2.2bn to £2.98bn within the yr.

Port Talbot, Britain’s largest steelmaker, produced 3.5 million tonnes of liquid metal within the yr to the top of March, up 100,000 tonnes from the earlier yr.

The corporate mentioned international demand for metal rose 2.7% in 2021 – up from development of simply 0.5% in 2020 – and international manufacturing rose 3.6%.

TSUK mentioned the restoration within the automotive sector was “significantly robust”. Nevertheless, provide chain points, significantly persistent shortages of semiconductors, hit metal demand within the automotive sector within the second half of the corporate’s fiscal yr.

The headcount fell from 7,992 to 7,890 within the yr to March 31 – as complete pay, pensions and redundancies rose from £313m to £406m – with the corporate warning of the potential influence of the price of residing disaster.

“The excessive price of residing for workers creates further challenges for TSUK in guaranteeing pay and circumstances expectations are met for all events and correctly recognizing ongoing worker tasks,” the corporate mentioned. “Retaining a important mass of engineers and different specialist positions stays a problem.”

Regardless of the return to profitability, the corporate mentioned it nonetheless wants assist from the UK authorities to make sure its metal enterprise stays sustainable in the long run and to modify to greener manufacturing strategies.

“TSUK is constant discussions with the UK authorities to search out assist for the transition to low-carbon metal, which is an important a part of securing a sustainable long-term future for the enterprise,” he mentioned.

On the finish of its monetary yr, the corporate reported web debt of £852m, up from £780m a yr earlier, whereas gross loans rose to £952m from £836m.

TSUK final reported pre-tax earnings of £13m in 2009. It mentioned that whereas international metal demand will develop by 0.4% this yr, its core area of Europe, which accounts for 96% of complete income, will fall by 1.3% amongst EU international locations.

“The outlook for 2022 could be very unsure because of the conflict in Ukraine,” the corporate mentioned. “This occasion had a severe influence on the European Union as a result of its dependence on Russian energy and its geographical proximity to the battle zone. There are even decrease dangers from Covid virus infections, greater vitality prices and rising rates of interest. “

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