The chemicals maker reported a 67.2% drop in consolidated net profit to Rs 74.15 crore in Q1 June 2020 from Rs 226.33 crore posted in Q1 June 2019.Consolidated net sales for Q1 June 2020 stood at Rs 2,348.16 crore, falling 9% from Rs 2584.03 crore in Q1 June 2019. Tata Chemicals said globally, the sales volumes of soda ash declined by 25% with sodium bicarbonate relatively flat. During the quarter, the export market in the US witnessed a steep drop of 45% as compared to previous year. Demand from export market was significantly low in the flat glass segment across the globe.
Profit before tax fell 68% to Rs 109.94 crore during the quarter. Total tax expense declined 68% to Rs 35.79 in Q1 June 2020 over Q1 June 2019.
The company's UK operations did not suffer any significant disruption in production or sales with customer demand remaining as expected. Sodium bicarbonate experienced a healthy growth in demand across user sectors. In Kenya, the company said it did not face any disruption in production but dispatches to the Indian market and South-East Asian countries were disrupted due to lockdown in those countries.
On a standalone basis, the income from operations stood at Rs 628 crore, down 12.6% from Rs 719 crore posted in the corresponding quarter of last year. Profit after Tax (PAT) on standalone basis was Rs 109 crore, down by 47% from Rs 206 crore in the corresponding quarter of last year.
The company's results by reporting segment showed income from operations for the basic chemistry products at Rs 1,672 crore, down by 14%, and specialty products at Rs 676 crore, up by 7%.
Commenting on the results, R. Mukundan, managing director & CEO, Tata Chemicals said, Despite the unprecedented times, we continued the production and supply of the essential commodities after undertaking all necessary safety measures. In Q1, we adapted to the new normal with a consistent focus on product supply, cash position, optimal CAPEX, and calibrated fixed costs to build up and conserve our healthy cash position. During the quarter, there was no material change in the Company's liquidity position, with no borrowings and sufficient credit lines available. As we step forward, our aim is to move soda ash towards value added products in Performance Materials business, consistent growth in Nutrition science and Agri-science Businesses and seeding the Energy science business."
Shares of Tata Chemicals closed 1.39% lower at Rs 305.60. The result was announced after market hours yesterday, 31 July 2020.
Tata Chemicals is a global company with interests in businesses that focus on basic chemistry products, consumer and specialty products.
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