Tata Chemicals (TCL), on Monday, reported a consolidated loss of Rs. 188 crore for the fourth quarter of 2012-13 against a profit of Rs. 138.5 crore in the same period last year. The loss is mainly due to the non-cash write-down of goodwill of Rs. 484 crore relating to its European operations.
During the period, TCL’s income was marginally lower at Rs. 3,361.77 crore (Rs 3,397.67 crore) as was the operating profit at Rs. 351.41 crore (Rs. 376.65 crore).
“As regards the impairment charge we have basically followed prudent accounting norms given the demand and weak macro-economic environment in Europe,” R. Mukundan, Managing Director, Tata Chemicals, told a press conference here. “There is an underlying softness in demand in the U.K. for soda ash and some demand segments in Europe have seen a 30 per cent drop in soda ash demand,” he said.
He said the U.S. operations continued to do well, although TCL’s Kenya operations were impacted by floods. In India, TCL was impacted by the delay in fertiliser subsidy payment . “As on March 30, 2013, subsidy TCL’s receivables was at Rs. 1,753 crore (Rs 1,100 crore) and this delay is likely to continue further. It is a substantial hit on the working capital,” he said.
Rs. 10 dividend for FY’13
For the year 2012-13, Tata Chemicals reported a drop in consolidated profit at Rs. 400.47 crore (Rs. 837.6 crore) on higher total income of Rs. 14,858.8 crore (Rs. 13,815.03 crore). The directors have recommended a dividend of Rs. 10 per share for the year.
After providing Rs. 471.55 crore (Rs. 48.45 crore) for impairment of assets, operating profit was down at Rs. 1,629 crore (Rs. 1,766.7 crore). TCL’s domestic chemicals and consumer business grew 36 per cent at operating profit level while fertilizer had a 20 per cent drop in operating profit. “With continued softness in fertilizer segment, we expect a muted performance even though there is a positive tail wind from expectations of a normal monsoon,” the TCL MD said.
The company has a capital expenditure plan of Rs. 700 crore over the next 2-3 years, including expansion of salt capacity. “We expect times to be challenging both domestically and internationally and this coupled with liquidity crunch due to delayed payment on subsidy continues to drag the company’s performance,” Mr. Mukundan said.