A huge provision for impairment on overseas assets and subsidiary receivables from the Government has widened Tata Chemicals’ loss to ₹1,226 crore in the March quarter against a loss of ₹188 crore reported a year ago. Net sales were up 11 per cent at ₹3,646 crore.
The company has declared to pay a dividend of ₹10 a share.
It has made a total provision of ₹1,303 crore in the March quarter, including ₹984 crore for restructuring Kenyan operations, ₹143 crore for diminution in the value of investment made in the Toronto Stock Exchange-listed EPM Mining Venture, and ₹242 crore for a restructuring exercise at the Winnington facility in the UK.
R Mukundan, Managing Director, Tata Chemicals, said the company has proposed mothballing of the premium ash plant operation in Magadi, Karnataka, to help reduce energy cost.
“The decision follows a comprehensive review of alternatives tested over the last few years to improve operational efficiency. The restructuring being undertaken now would ensure better future for the standard ash, CRS (crushed refined soda) and salt business in Magadi. There may be an additional provision in the first quarter of this fiscal, but it would be in double digit,” he said.
The Government has to pay ₹1,802 crore to Tata Chemicals for selling urea at a subsidised rates. This receivable had an impact of ₹45 crore on the working capital.
The company had to cut the fertiliser output at its Babrala plant in Uttar Pradesh, as it could not achieve import parity with the high cost of production, due to a sharp jump in liquefied natural gas prices. Urea production was down 26 per cent at 220,000 tonnes (299,000 tonnes) in the March quarter, while sales dropped 19 per cent to 226,000 tonnes. Phosphate-based fertiliser output was also down 9 per cent at 118,000 tonnes, and sales dipped 7 per cent at 144,000 tonnes.
On Friday, the company’s scrip closed 3.62 per cent down at ₹303.45 on BSE.