Tata Chemicals net loss widens to Rs 1,226 crore
Mumbai: Tata Chemicals on Friday reported that its consolidated net loss widened to Rs 1,226 crore in the March quarter on account of higher provisioning for impairment of overseas assets.
The company had posted a loss of Rs 188 crore a year earlier. On a standalone basis, Tata Chemicals' profit declined to Rs 81 crore from Rs 159.76 crore in the same quarter of the previous year.
On a consolidated basis, income from operations rose to Rs 3,695 crore during the quarter from Rs 3,328 crore.
Tata Chemicals had to make higher provisions for the impairment of fixed assets and goodwill at its Magadi plant in Kenya, amounting to Rs 924 crore, on account of higher energy costs, Managing Director R Mukundan said.
The company also announced the restructuring of its Kenya plant and said it has started consultations with the union and employees.
The company set aside Rs 180 crore towards diminution in the value of investment in its EPM mining venture in Canada, where it has a 25 per cent stake, in view of a significant decline in the share price compared with the carrying value of the investment.
It provisioned Rs 242 crore for restructuring costs related to the closure of its Winnington plant in Britain.
"What we have been doing in the last one-two years was to look at sustainability of operations and make them more robust. We went through restructuring four years ago, addressing the Netherlands operations where we shut down the plant as it was unviable.
"Last year, we shut down the Winnington plant in Britain. Now, we have taken a similar action in Kenya with respect to the pure ash plant which was clearly unviable," Mukundan said.
For the full fiscal, Tata Chemicals reported a net loss of Rs 1,032 crore as against a net profit of Rs 400 crore in FY13.
On a consolidated basis for the full fiscal, income from operations rose 8 percent to Rs 15,895 crore from Rs 14,711 crore in FY13. Standalone full year profit stood at Rs 436 crore, down from Rs 643 crore.
In the quarter ended March, unit Rallis India's net sales rose 16 per cent to Rs 324 crore, while net income grew 71 percent at Rs 19 crore.
In the fertiliser business, the subsidy outstanding stood at Rs 1,802 crore, which continued to drag performance.
However, the non-bulk farm business performed well and increased to Rs 2,408 crore, up 22 percent.
Fertiliser business performance for the March quarter was impacted because of restricted capacity utilisation at Babrala due to lack of clarity on policy and gas cost reimbursement on the above cut-off production.
The consumer products business continues to grow and reported its highest revenue, crossing Rs 1,300 crore during FY14, a growth of 11 percent.