INDIAN automaker Tata Motors posted a 63% slump in quarterly profit on Friday, its fourth straight quarter of decline, as U.S. tariffs hurt businesses that were already reeling from weak sales.
U.S. duties wiped 254 million pounds ($341.33 million) off its quarterly earnings, the company said, adding that the tariffs and its planned model phase-out for its luxury Jaguar Land Rover cars, made predominantly in the United Kingdom, dealt a direct blow to profit and cash flow.
However, kept its JLR forecast unchanged, saying a U.S.-UK trade deal signed in May would sharply cut the tariff hit.
It had earlier reported a 11% fall in overseas sales at its luxury car unit due to the U.S. export halt and the phase-out of older Jaguar models.
Speaking to reporters in a post-earnings call, Chief Financial Officer P.B. Balaji also said that China's ban on rare earth magnets export had not affected the company, and added that it had de-risking plans in place to avoid any impact in the medium term.
Last week, rivals Hyundai Motor India and Mahindra & Mahindra had downplayed concerns over the export ban.
The magnets are key to EV motors and components in conventional cars such as power windows and speakers.
The company reported a profit of 39.24 billion rupees ($447.8 million) in the April-June quarter, down from a restated 105.14 billion rupees a year earlier that includes a 49.75-billion-rupee one-time gain.
Excluding the gain, profit was down 30.5%.
Quarterly revenue fell 2.5% from a year earlier as sales slowed, mirroring trends at Maruti Suzuki India and Hyundai.
Tata Motors expects demand to remain challenging but aims to boost performance as clarity on tariffs emerges and festive demand picks up, Balaji said.
The results follow two major developments - Tata Motors' $4.36 billion acquisition of Italian truckmaker Iveco and JLR chief Adrian Mardell's exit.
Mardell, who had been with the company for more than three decades, revamped the Jaguar brand, delivered its highest profit in a decade and cut $6.6 billion in debt.
Earlier this month, Tata Motors named CFO Balaji as JLR's new CEO - REUTERS
