Amtek Auto net profit increases on UK purchase, sale of shares

Amtek Auto net profit increases on UK purchase, sale of shares
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First Published: Wed, Apr 30 2008. 10 27 PM IST
Updated: Wed, Apr 30 2008. 10 27 PM IST
New Delhi: Auto parts and crankshaft maker Amtek Auto Ltd reported on Wednesday that its net profit for the quarter ended March rose 11.2% from a year ago, as it completed integrating an acquired unit and sold shares.
In November last year, Amtek had acquired the UK-based automotive precision machinery firm Triplex-Ketlon Group that has yearly revenues of Rs600 crore.
Amtek’s chief financial officer Santosh Singhi also said the company’s other income went up by Rs56 crore from sales of shares and scrap.
“The company’s numbers are up because of the acquisition,” said Vaishali Jajoo, an analyst with Angel Broking Ltd. “Otherwise their numbers are not in line with our expectations,” she added.
Amtek’s profit margins declined by a percentage point from a year ago, squeezed by higher prices of raw materials such as steel.
The companay’s depreciation increased by 45% as the company started operating three new factories in Pune.
Prices of steel have risen by more than 30% since January, reducing margins of auto and auto-parts makers.
“The factories are operating at only 30% capacity utilization levels, and in our industry, it takes more than a year to ramp up,” Singhi said.
He added that sales and profits are likely to take off in the July-September quarter as the company increases production and factors in the rise in raw material prices.
Amtek, which a month ago notified the stock exchanges about a possible mark-to-market loss of Rs72 crore over the next two years, said it hadn’t incurred any cash loss on account of foreign exchange derivatives this quarter.
“Our yearly closing is in June and we’ll account for it then,” said Singhi.
“Anyway, mark-to-market accounting is not obligatory.”
The company’s share price closed down Rs2.35, or 0.8%, to Rs292.65 on the Bombay Stock Exchange on Wednesday, even as the exchange’s benchmark sensitive index, or the Sensex, lost 91.15 points, or 0.52%, to end the day at 17,287.31.
Reuters contributed to this story.
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First Published: Wed, Apr 30 2008. 10 27 PM IST