Tata Motors reports Q2 loss because of Tianjin explosion
Tata Motors Ltd reported second quarter loss of £112 million on Friday.
The company was hit by weak sales in China and a one-time loss of £245 million related to a large explosion at China’s Tianjin port – which destroyed nearly 5,800 cars and killed more than 150 people.
In the three months to 30 September the company posted pre-tax earnings of £154 million, down from £567 million in the same quarter last year.
“Less favourable sales and regional mix and higher launch cost for the Jaguar Land Rover (JLR) segment along with unfavorable forex move on Europe weighed on segment earnings,” said Chandrasekaran Ramakrishnan, group CFO, Tata Motors.
Tata’s Jaguar Land Rover (JLR) business reported sales of £4.8 billion in the quarter, driven by higher wholesales in the UK (up 30% year-on-year), mainland Europe (up 20% year-on-year) and US (up 65% year-on-year).
Strong performance in Europe and the US helped offset weaker sales in China and other emerging markets. Sales in China contracted 32% to about 19,835 units during the second quarter, with the contribution of China to the segment’s quarterly retail sales down from 27% the last year to 18%.
Jaguar Land Rover wholesales (excluding from China JV) and retails (including from China JV) for the quarter were 111,160 units and 110,200 units, respectively.
Tata Motors said that its medium and heavy commercial vehicle (M&HCV) segment continued to grow at a robust rate of 35.3 % year-on-year.
Shares in Tata closed 1.9 percent lower on Friday.