On Thursday, Tata Motors Ltd reported a huge loss amounting to Rs 26,961 crore for the third quarter of the financial year 2018-19. The quarterly results were affected by a one-time expense of exceptional non-cash charge for asset impairment worth 3.1 billion pounds related to Jaguar Land Rover.
In the December 2017-ended quarter, its profit stood at Rs 1,214.60 crore.
The company’s consolidated revenue rose by 5 percent to Rs 77,001 crore for the October-December 2018 quarter. The automaker said that its profits were hurt by challenges in market condition especially in China and corrections in inventory.
In a stock exchange filing, Tata Motors said, “we are announcing a non-cash exceptional charge to reduce the book value of our capitalised investments. This accounting adjustment is consistent with the other decisive actions that we must take as part of our ‘Charge’ and Accelerate transformation programmes to create an efficient and resilient business, enabling Jaguar Land Rover to counter the multiple economic, geopolitical, technological and regulatory headwinds presently impacting the automotive industry. We are taking the right decisions now to prepare the company for the new technologies and strong product offensive for the future.”
The company further pointed out that in January JLR had announced its plans to achieve £2.5 billion of investment, working capital and profit improvements by March 2020, which it suggested would require a reduction in its global workforce by 4,500 people. It was a part of the company’s focus to step up competitiveness, reduce costs and increase cash flows.
It also said that this is expected to result in a one-time exceptional redundancy cost of around 200 million pounds.
On Wednesday, Fitch Ratings had placed Tata Motors’s credit rating on negative watch stating the risk of trade barriers and logistics issues from a disorderly Brexit that could impact its luxury car arm- Jaguar Land Rover.
In January, JLR said that it is expecting a week-long pause in production in the month of April from potential disruption on account of Brexit.
This story has not been edited by Topic Hunt (with the possible exception of the headline) and has been generated from a syndicated feed. (GoodReturns)