Business

MRF Q4 income drops ₹500 cr.

Lower tax provision boosts profit; declares ₹94 final dividend

The unprecedented lockdown resulted in a drop of more than ₹500 crore in total income for tyre manufacturer MRF Ltd. during the fourth quarter ended March 2020 from a year earier. Compared with the December 2019 quarter, the company reported a drop in income of about ₹400 crore.

The lockdown announced to curb the spread of COVID-19 had led to the closure of MRF’s plants and godowns, the company said. The tyre industry had been facing demand issues for some time. However, the Centre imposing restrictions on the import of tyres was likely to be of immense help to the tyre industry at a difficult time as this, MRF said.

MRF had a strong net worth and serviced all its debt obligations in a timely manner. It does not foresee any incremental risk regarding recoverability of assets and ability to service financial obligations. For the fourth quarter, MRF posted standalone net profit of ₹669 crore against ₹294 crore in the year-earlier period. Total income dropped to ₹3,683 crore from ₹4,183 crore.

MRF opted for the lower income tax rate and re-measured the deferred tax liabilities/assets. Accordingly, the net provision for tax (current tax and deferred tax) for the year is ₹4 crore (₹512 crore). Therefore, the full year standalone net profit rose 27% to ₹1,395 crore.

The board recommended a final dividend of ₹94 per share. With two interim dividends of ₹3 each paid during the year, the aggregate dividend for the year is ₹100 per equity share.

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Printable version | Jul 6, 2020 8:09:49 AM | https://www.thehindu.com/business/mrf-q4-income-drops-500-cr/article31948010.ece

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