In-depth financial research by Unite, the UK’s leading union, has exposed Tata’s claims that it has to cut jobs and close its blast furnaces for financial reasons, as a sham.

Huge profits

Tata Steel Limited, the direct parent company of Tata Steel UK Limited made £3 billion in EBITDA and £900 million in net profits in 2022/23. Tata Steel Limited has reserves of £1.6 billion and has paid out dividends of £1.4 billion to shareholders between 2019 and 2023.

In the last five years Tata Steel Limited’s revenue has grown by 47 per cent and it has generated a combined profit of £9.7 billion during that period. Tata Sons - parent company of Tata Steel Ltd is the massive Indian holding company of Tata Steel. Its company returns describe 2023 as its “best ever”.

Making money had over fist

Unite general secretary Sharon Graham said:: “Tata’s pleas of poverty have been exposed as a sham. They are making money hand over fist and will only profit from bringing in more Indian and Dutch steel to the UK if we cut capacity.

"It is unbelievable that the government is going along with this. Rather than demanding that the needed investment comes with jobs guarantees and growth for UK steel – they are giving Tata half a billion of taxpayers’ money to slash its workforce and flood the UK with foreign steel. 

“Port Talbot is far from the basket case that Tata has painted it as, there is an underlying healthy business, which could be transformed by serious investment to increase capacity, with the UK becoming the green capital of steel. 

“Instead Tata has cynically chosen to close its blast furnaces and cut skilled jobs to boost its own interests at the expense of UK workers, UK industry and the UK economy."

Losses questioned

Tata’s claim that it is losing between £1 million to £1.5 million a day fails to stand up to scrutiny. In 2022/23 Tata Steel UK reported an EBITDA loss of £440,000 The losses were largely due to high energy prices and lower production levels. But any losses are expected to be substantially down in the current year by the company’s own reckoning, as energy prices have fallen and the company expects that market conditions will improve.

In 2021/2022 Tata Steel’s subsidiary, Tata Steel UK reported an EBITDA (Earnings, Before Interest, Taxes, Depreciation and Amortisation) of £193 million and post-tax profits of £208 million (due to a large tax subsidy). Meanwhile the UK company still has £270 million in cash reserves.

Indian steel imports

Meanwhile Tata has been profiting from steel imported to the UK from its plants in India and the EU. Tata is already importing growing volumes of Indian steel into the UK. Analysts describe Tata Steel as a “key asset” of Tata Sons, and note that “the reputation of the two entities is closely tied” – concluding that Tata Sons will provide extraordinary financial support to Tata Steel, if required.

Tata Steel Group’s also has profitable operations in the EU – notably in the Netherlands – which would benefit financially from increased exports of steel to the UK.

ENDS

Notes to Editors:

Within the Tata multinational empire there are three significant entities to consider when trying to follow the money in Tata’s finances. These are Tata Steel UK a subsidiary of Tata Steel Ltd which in turn has a parent holding company of Tata Sons Ltd - embracing the Tata international empire.

Tata Steel UK

The common figure which circulates from Tata is that the Port Talbot operation is losing £1m - £1.5 a day.

The EBITDA figure (Earnings Before Interest Taxes Depreciation Amortization ) is used to compare company profits; in 22/23 the Tata Steel UK EBITDA figure reports losses of £440,000 a day.

BUT Tata’s UK subsidiary Tata Steel UK Ltd figures for 2021/2022 show pre-tax profits of £83m and post tax profits - thanks to large tax credit - of £208m. That means final profit earnings of £570,000 a day.

Tata Steel UK has £270m in reserves

Tata Steel Ltd - Parent company of Tata Steel UK

In 2022/2023 Tata Steel EBITDA figure was an enormous £3 billion and net profits were £900m;

Between 2019 and 2023 Tata steel paid out £1.4billion in dividends to shareholders;

In the last 5 years Tata Steel Ltd has made £9.7 billion in profits EBITDA;

Reserves - £1.6 billion

Tata Steel Group has invested far more, and seen higher profits, in Europe

Tata Steel Group has invested up to 60 per cent less in its UK operations than in its European operations - notably IJmuiden Works in the Netherlands.

As a result of this investment, Tata Steel Group’s European operations have been very profitable: recording EBITDA of £1.2 billion in 2021/22, and £464 million in 2022/23.

Tata Sons - Parent company of Tata Steel Ltd

Tata Sons is the massive Indian holding company of Tata Steel.

It’s company returns describe 2023 as its “best ever”

Analysts describe Tata Steel as a “key asset” of the Tata Sons, and note that “the reputation of the two entities is closely tied” – concluding that Tata Sons will provide extraordinary financial support to Tata Steel, if required.

The conclusion Unite has drawn from this investigation is that Tata Steel is awash with money and Tata is bleeding the British taxpayer dry in effect to make the UK finally dependent on foreign imports of virgin steel.

For media enquiries ONLY please contact Unite senior communications advisor Barckley Sumner on 07802 329235.

Email: barckley.sumner@unitetheunion.org

Unite is the UK and Ireland’s leading union fighting to protect and advance jobs, pay and conditions for members working across all sectors of the economy. The general secretary is Sharon Graham.