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Informist, Monday, Feb. 3, 2025

 

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--Tata Chem Oct-Dec consol net loss INR 530 mln vs INR 1.58 bln PAT year ago 
--Tata Chem Oct-Dec consol revenue INR 35.90 bln vs INR 37.30 bln year ago 
--Tata Chem Apr-Dec consol net profit INR 2.91 bln vs INR 11.18 bln year ago 
--Tata Chem Apr-Dec consol revenue INR 113.78 bln vs INR 119.46 bln year ago 
--Tata Chem Oct-Dec basic chemistry pdts sales INR 30.31 bln vs INR 31.01 bln 
--Tata Chem Oct-Dec specialty pdts sales INR 5.62 bln vs INR 6.29 bln yr ago 
--Tata Chem Apr-Dec basic chemistry pdts sales INR 90.43 bln vs INR 96.08 bln 
--Tata Chem Apr-Dec specialty pdts sales INR 23.43 bln vs INR 23.40 bln 
--Tata Chem: One-time cost of INR 700 mln in Oct-Dec

 

By Akshay V. Johnson and Aman Aryan

 

MUMBAI – Tata Chemicals Ltd. reported a consolidated net loss for the second time in the last four quarters. This was largely due to a one-time loss of INR 700 million in the December quarter as one of the step-down subsidiaries decided to cease its soda-ash production at the Lostock plant in Northwich, the UK, due to the plant's sustained financial under-performance.

 

The company reported a consolidated net loss of INR 530 million for the December quarter compared with a net profit of INR 1.58 billion in the year-ago quarter. The company's revenue for the December quarter was INR 35.90 billion, down 4% on year and 10% sequentially. The company's other income for the quarter fell 26% on year to INR 280 million.

 

Apart from the one-time loss, lower prices of soda ash across geographies and higher fixed costs in the US due to a plant production outage also weighed down the company's earnings for the December quarter, Tata Chemicals said in a release.

 

Revenues for the company fell on year despite the company booking a 4% on-year increase in soda ash volumes during the quarter under review. Tata Chemicals' sales volume for the quarter was 846,000 tonnes, compared with 811,000 tonnes a year ago. During the December quarter, it sold 63,000 tonnes of sodium bicarbonate, up 15% on year, and 425,000 tonnes of salt, up 4% on year.

 

The company reported total expenses of INR 35.84 billion for the December quarter, flat on year. Its freight and handling expenses rose 16% on year to INR 6.45 billion.

 

For Apr-Dec, the company's net profit was INR 2.91 billion, compared to INR 11.18 billion, while the revenues were INR 113.78 billion compared to INR 119.46 billion a year ago.

 

Tata Chemicals' earnings before interest, tax, depreciation, and amortisation for the quarter was INR 4.34 billion, down 20% from the year-ago quarter, due to decline in realisation. The chemicals company's consolidated EBITDA margin for the quarter also contracted 300 basis points from the year-ago quarter to 12% during the latest quarter. 

 

Revenue from its basic chemistry products segment and speciality products segment fell 2% and 11% on year, respectively, pulling down the overall revenue of the company. Its basic chemistry products segment generated revenues of INR 30.31 billion and the speciality products segment generated revenues of INR 5.62 billion during the quarter. For the nine months ended December, the basic products segment's revenue fell 6% on year to INR 90.43 billion, while revenue from speciality products segment was flat on year at INR 23.43 billion. 

 

The company saw robust growth at its operations in China and India, while the US and western Europe witnessed slight declines due to reduced demand for flat and container glass, Tata Chemicals said. The company said it saw robust demand in other regions of Asia, while a slight decline was observed in Africa and the Americas, excluding the US.

 

Revenues from its Indian operations for the December quarter rose nearly 7% to INR 11.66 billion and from its US operations rose 1% to INR 12.73 billion. On other hand, revenues from the UK, Kenya, and Rallis fell 11%, 17%, and 13% on year, respectively. Its Rallis and US operations' EBITDA margin contracted 100 bps each during the quarter. Tata Chemicals' EBITDA margin contracted the most at its Kenya operations, where it contracted 18 percentage points on year to 16% during the December quarter.    

 

Its gross debt rose INR 8.10 billion from the year-ago period to INR 67.22 billion as of Dec. 31, while its net debt rose by INR 9.52 billion to INR 53.29 billion due to lower EBITDA and higher working capital at the US, Kenya, and India operations.

 

Tata Chemicals plans to focus on value-added products such as pharma salt and premium grade bicarbonate for its UK operations, whereas it looks to extend its product portfolio by introducing new products to plug portfolio gaps at its Rallis operations, according to the company's investor presentation. 

 

"Our endeavour is to maximise sales through customer engagement, while ensuring steady contribution margins with a focus on cost optimisation," said R. Mukundan, managing director and chief executive officer, in a release. "In the short term, current demand-supply adverse situation is likely to persist but should improve and stabilise over the long term driven by growth sectors based on sustainability trends," he added. 

 

The company announced its earnings after market hours. Monday, shares of the company closed at INR 946.55 on the National Stock Exchange, down 1.8%.  End

 

Edited by Akul Nishant Akhoury

 

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