Ceat Q1 results: Reports net loss of Rs 35 crore; revenue contracts 36%

Mumbai: Tyres maker Ceat Limited on Wednesday reported a loss for the April-June period as revenue contracted by over 36% due to the nation-wide lockdown during the quarter to contain the Covid-19 pandemic.

The company reported a consolidated loss of Rs 34.8 crore as against a Rs 82.6 crore-profit in the corresponding quarter last year. Consolidated revenue was at Rs 1,123 crore, as against Rs 1,764 crore last year.

Earnings before interest, tax, depreciation , and amortisation (EBITDA) margin stood at 9.4%, a contraction of 40 basis points. One basis point is 0.01%.

“The quarter started off at zero level because of the lockdown in April. But post lockdown things started to pick-up in May. We expected the quarter to be challenging but overall the quarter was much better than we expected,” said Anant Goenka, managing director of the RPG group company.

Goenka said that demand in June was near to normal levels, especially for the replacement tyres segment, which accounts for 60% of the company’s sales.

Standalone revenue contracted 37% to Rs 1,084.2 crore with a net loss of Rs 14.6 crore against a profit of Rs 87 crore in the corresponding quarter in the preceding year. Standalone EBITDA margin remained flat at 9.3%.

The company incurred exceptional charges of Rs 21 crore largely on account of the impact of the coronavirus pandemic.

“This has been an unprecedented quarter. There was a huge focus on cashflow through maximisation of cash generation and judicious utilisation of cash during the quarter supported by well-planned actions in the areas of working capital & capex. We kept strong controls on our costs that has helped in delivering reasonable margins despite a drop in revenues. We have managed to contain our net debt levels with adequate liquidity to meet our financial obligations despite lower level of operations and have ended the quarter with healthy leverage ratios,” said Kumar Subbiah, the company’s chief financial officer.

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