Speciality steel and wire rope manufacturer Usha Martin has reported a consolidated loss of INR 21.35 crore during the Q1 of the current fiscal against a net profit of INR 4.09 crore in the corresponding quarter of the previous fiscal.

Earnings came under pressure because of a 59% rise in depreciation and amortisation expenses at INR 116.05 crore even as consolidated net sales increased 24.4% to INR 1,155.28 crore. The earnings before interest, depreciation, taxes and amortisation stood at INR 211.14 crore against INR 181.32 crore in the same period a year ago.

Mr Prashant Jhawar CMD of Usha Martin said that depreciation charges had been raised from April 1st 2014, affecting the bottomline. Profits declined in the steel segment during the Q1 while the earnings of the wire and wire rope segment improved. The company’s cost of raw materials increased even as its own production of coal and iron ore declined.

Mr Jhawar said that the company had completed all its cost reduction initiatives. Stabilization of the projects is expected to improve the profits in the coming quarters. The company has appointed consultancy firm Accenture to improve business, reduce costs and improve operational efficiency.

Source – Telegraph India