Tata Chemicals reported a 133 per cent growth in its consolidated net profit at Rs.176 crore for the first quarter of 2014-15 on the back of better realisations at its North American operations and a lower base in the year-ago period. Net sales grew 17 per cent to Rs.3,847 crore.
In India, better realisations across verticals and robust soda ash demand boosted growth. Contribution from the fertilizer business grew 43 per cent to Rs.1,187 crore as the Haldia unit, which was shut in the year-ago quarter due to shortage of input, operated fully in the quarter.
The company completed the restructuring in Magadi, Kenya, where it implemented a voluntary retirement scheme (VRS) offered to around 200 employees.
R. Mukundan, Managing Director, told a press conference here that the company would take a hit of around $8 million in the next quarter on this account. This month onwards, the unit should be EBIDTA (earnings before interest, depreciation, tax and amortisation)-positive, he said.
In U.K., the steam turbine will be commissioned by September 2015 and operations are expected to turn cash-neutral this year and cash-positive after it is commissioned.
The company’s gross debt is at Rs.8,371 crore and net debt at around Rs.6,800 crore. In India, its debt is Rs.3,000 crore and this would halve over five years, he said.
The MD said the fertilizer policy from the government was still awaited and although urea continued to deliver profits, “the trend will not change substantially going forward.”
The company’s non-subsidised agri input segment grew 28 per cent and the fertilizer business contributed around Rs.1,200 crore. The company is targeting raising the non-subsidised portion to above 50 per cent in five years.
“The focus for us is to increase the branded products in consumer and farm sectors where there is no subsidy,” Mr. Mukundan said adding that Tata Chemicals would not increase fertilizer capacity in India as gas prices here were too high.
The company is still to recover Rs.1,687 crore from the government as re-imbursement of fertilizer subsidy.
On Tuesday, on the Bombay Stock Exchange, the company’s stock moved up by 3.04 per cent to close trading at Rs.374.4.
