JLR suffers worst quarterly loss - RM17.9 bil in Q4 '18

Roman Schwartz
February 8, 2019

PB Balaji, CFO, Tata Motors, said, "The 4-7 percent guidance was for the period between FY20 and FY22". At 10 am, the scrip was trading at ₹155.15 on National Stock Exchange, down 15.2% from its previous close while India's benchmark Sensex fell 0.5% to 36,792.38 points.

The company had posted a net profit of Rs 1,215 crore in the year-ago quarter. Jaguar chief executive Ralf Speth said: "Jaguar Land Rover reported strong third-quarter sales in the United Kingdom and North America, but our overall performance continued to be impacted by challenging market conditions in China". "Given the muted demand scenario and the associated impact on the financials, Jaguar Land Rover has concluded that the carrying value of capitalized investments should be adjusted down, resulting in a non-cash £3.1 billion pre-tax exceptional charge and an overall pre-tax loss of £3.4 billion for the quarter", said Tata Motors in a statement. "Apart from the results, we are concerned by the significant erosion in equity led by the impairment and fear it would lead to rating actions by the agencies", said Nitesh Sharma, analyst at Phillip Capital. "Cash flow generation is contingent upon improvement in business, which is unlikely to improve in the near future", said Sabarad.

JLR's retail sales were down 6.4 per cent to 1,44,602 units, while wholesales were down 11 per cent to 1,41,552 in the third quarter. This, in turn, singed earnings at the firm. While revenues at the United Kingdom subsidiary were down 1 per cent to 6,233 million pounds over the year-ago quarter, margins contracted by 360 bps to 7.3 per cent. It incurred a loss of 3,129 million pounds.

The luxury vehicle market was down 15 percent year-on-year in China.

JLR's Chinese sales, which account for roughly one-in-seven of its global sales, fell 40 per cent year-on-year, which offset growth in the U.S. and British markets.

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"We have five global regions around the world and we are more or less nicely balanced in terms of volume across these markets, but depending on the level of downturn in China, the impact is most likely to affect the premium auto market as a whole, no ifs or buts", Speth said.

Total expenditure: Consolidated expenditure jumped to Rs 78,797.08 crore in Q3 FY19 over Rs 72,303.95 crore in the same period a year ago.

Excluding the one-off accounting charge, JLR lost £273m before tax during the last quarter.

The troubles may mount if the United Kingdom and EU Brexit deal is worse than expected.

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