Mahindra & Mahindra’s Profit Slides On One-Time Ssangyong Hit
Mahindra and Mahindra Ltd reported a droop in third-quarter revenue on Friday, because the carmaker reported a one-time loss on its South Korean unit Ssangyong Motor which has filed for chapter
Mahindra, as a part of a wider evaluate to retain solely these companies with the potential to earn money, has been in talks to promote its stake in Ssangyong.
The South Korean automaker, nevertheless, filed for a pre-packaged rehabilitation chapter plan in December “which may involve capital restructuring for existing and current shareholders”, Mahindra mentioned in a press release.
Mahindra estimates it should incur a one-time lack of Rs 1,210 crore associated to Ssangyong and the unit can even stop to be its subsidiary.
Upon approval of the chapter plan, “the court will commence rehabilitation proceedings and appoint a receiver to manage the affairs of the company”, Mahindra mentioned.
On a standalone foundation, revenue after tax was Rs 30.93crore for the quarter ended Dec. 31, in contrast with Rs 307 crore a 12 months earlier, Mahindra mentioned.
However, Mahindra’s standalone leads to mixture with these of its manufacturing unit translate to a revenue after tax of Rs 531 crore for the third quarter, a 40 per cent bounce from the identical quarter a 12 months earlier.
“Capital allocation actions were targeted at loss-making subsidiaries, these actions have made a significant contribution to the financial performance,” it mentioned.
Mahindra, which final month mentioned would enhance costs of its private and business autos, continued to warn of challenges resulting from a scarcity of semiconductors and rise in commodity costs.
As a part of its evaluate, Mahindra has additionally ended its three way partnership with Ford Motor Co and has reduce greater than half of the workforce at its North American unit.
