Tata Chemicals posts Rs 841-crore net loss in Q4, declares Rs 15 dividend
Tata Chemicals posts Rs 841-crore net loss in Q4, declares Rs 15 dividend
Tata Chemicals Ltd reported net loss of Rs 841 crore in the January-March quarter of FY24.
The Tata Group firm posted a profit of Rs 692 crore in the same period a year ago. The firm declared dividend of Rs 15 per share.
During the year ended March 31, 2024, Tata Chemicals has recognised a non-cash write down of assets aggregating total of Rs 963 crore which has been disclosed as an exceptional loss, in the Soda ash and Bicarb operations in United Kingdom.
The soda ash manufacturer’s revenue dropped 21.1 percent to Rs 3,475 crore in the fourth quarter, in comparison with Rs 4,407 crore in the year-ago period, according to an exchange filing issued on April 29.
The impairment is primarily due to unfavourable market conditions and reduced demand for soda ash in Europe and the persistently low pricing outlook in the jurisdiction based on which the cash flow projections have been revised downward, the company said. This impairment of Rs 963 crore represents the non-cash write down of the cash generating unit comprising property, plant and equipment of Rs 821 crore, capital work-in-progress of Rs 122 crore, Right-of-use assets of Rs 4 crore and other assets (net) of Rs 16 crore, relating to the UK Group operations, it added.
The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) came in at Rs 443 crore, down from Rs 965 crore in the year-ago period. The EBITDA margin was at 12.8 percent against 21.9 percent in the year-ago period.
Earlier this year in March, Fitch Ratings had revised the outlook on the long-term foreign-currency issuer default rating (IDR) of Tata Chemicals to “stable” from “positive” while affirming the rating at ‘BB+’.
The revision in the outlook is based on the view that the global soda ash industry will remain oversupplied for longer than previously anticipated. Demand in Europe has been weaker than expected in the current financial year, leading Turkish soda ash exports to pivot to Asia, resulting in industry oversupply pressuring Tata Chemicals’ operating margins, Fitch had noted.
Tata Chemicals Ltd., established in 1939, is a part of the Tata group. Tata Chemicals’ business segments include basic chemistry products, salt-making facility and specialty products (Post demerger of its consumer product business with appointed date of April 01, 2019). Tata Chemicals is currently the third-largest producer of soda ash in the world with presence across the globe. It has total annual soda ash capacity of 4.1 million tonne (MT), two-thirds of which is natural soda ash capacity leading to efficient operations in terms of lower operating costs. It is also the sixth-largest manufacturer of sodium bicarbonate in the world.