Forex loss in JLR: Tata Motors Q4 net down 56%

Scraps dividend due to weak performance

Hit by a huge forex loss in Jaguar Land Rover (JLR) and increase in depreciation and amortisation costs, Tata Motors reported a 56.19 per cent decline in consolidated net profit for the fourth quarter ended March 31, 2015, at Rs 1,716.50 crore, as against Rs 3,918.29 crore in the same quarter of the previous fiscal.

During the quarter, JLR reported a forex loss of £220 million. Depreciation and amortisation expenses during the fourth quarter jumped 23.34 per cent to Rs 3,856.76 crore compared with Rs 3,125.48 crore in the comparable quarter of the previous fiscal.
“Consolidated profit before tax for the quarter stood at Rs 2,771 crore against Rs 5,053 crore for the corresponding quarter last year, decreased due to higher depreciation and amortisation and adverse mark to market of un-matured  hedges not eligible for hedge accounting,” the company said.

Net sales for the company during the quarter grew 3.99 per cent to Rs 6,7297.99 crore as against Rs 6,4715.81 crore.

Interestingly, the company decided not to pay any dividend due to its weak performance during the quarter.

“Considering the continued weak operating environment in the standalone business and in view of the losses for the year, no dividend is permitted to be paid to the members for FY 2014-15, as per the Companies (Declaration and Payment of Dividend) Rules, 2014,” Tata Motors said.

JLR also recorded a decline in profit after tax for the quarter ended March 31, 2015 at £302 million as against £449 million in the corresponding quarter last year. Revenues for the quarter ended March 31, 2015, grew 8.9 per cent to £5,826 million compared with £5,349 million in the corresponding quarter last year. EBITDA for the quarter grew 10.4 per cent to £1,016 million as against £920 million, in the corresponding quarter, last year, with an operating margin of 17.4 per cent.

Tata Motors, which had recently raised over Rs 9,000 crore via a rights issue, plans to pare down debt via the proceeds of the rights issue.

“The standalone gross debt for the company currently stands at around Rs 21,130 crore. We expect the debt to come down by around Rs 4,000 crore over the next three months as we plan to repay the debt through the proceeds of the rights issue,” Vijay Somaiya, vice president and head (treasury and tnvestor relations), Tata Motors said.

According to JLR Chief Executive Officer Ralf Speth, the company’s EBIDTA may be lower in the current year.

Long way home  

Tata Motors consolidated net dips 56%
Forex loss in its JLR business and rise in depreciation, amortisation costs to blame
JLR records PAT decline at £302 million 
Company hopeful about business in China