Tata Sponge Q4 Net nosedives 79% to Rs 8.57 cr on lower sales

Tata Sponge Iron, an associate firm of Tata Steel, today reported a drop of 79 per cent in its net profit on a consolidated basis at Rs 8.57 crore for the fourth quarter ended March 31 on account of lower sales.
The company had posted a net profit of Rs 40.50 crore during January-March 2014.
Its net sales dipped 30 per cent to Rs 159.85 crore during January-March 2015 as against Rs 228.36 crore during the fourth quarter of the previous fiscal.
Total expenses of the firm stood at Rs 166.15 crore during the quarter as against Rs 181.64 crore in the corresponding quarter of the previous fiscal.

Its revenue from sponge business fell by 33.16 per cent to Rs 148.92 crore, while power business revenue also saw a decline of 74 per cent at Rs 4.58 crore during the quarter under review.
The company said it has disclosed Rs 32.50 crore as "contingent liability" with regard to the bank guarantee (BG) towards a coal block in the wake of a High Court order to keep the BG valid till May 28, 2015 by which the Court had asked the Coal Ministry to take a decision on it.

Coal Ministry in November 2012 had issued notice to the firm for invoking BG towards a block but the Court had granted a stay and asked Ministry to take decision by May 28.

It also said that during the pendency of the matter the Supreme Court had cancelled allocations of 204 coal blocks including one Radhikapur East mine alloted to it in which it had made investments of Rs 180.74 crore as on March 15 this year.
As per the Ministry's directive to furnish expenses by previous allottees, the company said it has submitted the details.
"Based on rules and necessary legal opinion obtained by the company, the provision made during the quarter ended September 30, 2014 on coal block expenses amounting to Rs 6.27 crore has been reversed during the current quarter", it said.

About Rs 23.54 crore other income, it said it included Rs 12.95 crore "being reversed of provisions made in earlier year in respect of indirect tax litigation based on favourable orders from competent authorities."
For the entire 2014-15 fiscal, the firm recoded a 9.14 per cent decline in its net to Rs 91.94 crore against Rs 101.19 crore.
Net sales was almost stagnant at Rs 766.23 crore during the last fiscal as against Rs 762.72 crore. Total expenses for the fiscal stood at Rs 703.45 crore as against Rs 654.64 crore in 2013-14.
The company's shares were trading 7.86 per cent down at Rs 720.60 per scrip during afternoon session on the BSE.