Motherson Sumi consolidated Q4 net profit down 68.4% year-on-year at Rs135.66 cr2 min read . Updated: 02 Jun 2020, 06:35 PM IST
The revenue during the quarter declines by 11.7% year-on-year at Rs15,159.05 crore
Motherson Sumi Systems Ltd – country’s largest automobile component manufacturer – on Tuesday announced a 68.40% year-on-year decline in consolidated net profit to ₹135.66 crore for the quarter ending March 31, on account of the shutdown of the factories across the globe due to the outbreak of the Covid-19 pandemic.
The Noida based manufacturer reported a net profit ₹429.31 crore in the corresponding period.
The revenue during the quarter declined by 11.7% year-on-year to ₹15159.05 crore when compared to 17169.47 crore, in the year ago period. The operating profit or the earnings before interest, tax, depreciation and amortization (EBITDA), though, increased by 6.69% year on year to ₹1355 crore from ₹1270 in corresponding quarter.
According to Vivek Chand Sehgal, chairman, Motherson Sumi Systems, considering that global automotive sales have declined in the same period and that the coronavirus pandemic was already impacting China and parts of Europe in the fourth quarter, this is a strong performance under the circumstances.
“We are encouraged by the fact that our large green-field projects have started to contribute positively to our revenues. We are currently focused on finding solutions to the challenges we face in our Tuscaloosa operations in close coordination with our customer. Most importantly, we have a robust order book, which reflects a continued trust and commitment from our customers. While there has been a lot of uncertainty in the market, it’s expected that the worst of the pandemic will fall in the next few quarters," added Sehgal in a statement issued.
During the quarter, Motherson had taken permission from its board to raise ₹1000 crore through issuance of nonconvertible debentures, to tide over any liquidity issues during such trying times.
According to G N Gauba, chief financial officer, Motherson Sumi Systems, the company’s net debt has come down to 6917 crore during the fourth quarter from ₹7992 crore in the year ago period. Total cash on the books stood at ₹4873 crore as on March 31.
“It is important that out debt is the lowest level in the last eleven quarters. We took an approval from our board for ₹1000 crore but we raised ₹500 crore because today’s situation is very uncertain. While everybody is making an effort to get back to the economic activity but it is taking more time that we had thought," added Gauba.
According to the company, it received new orders worth ₹43321 crore while orders worth ₹79554 crore went into execution.
“As a strategy we will think more short term today and most of our plants across the world are operational. Our plants in China came back first and we learnt a lot from there. Current demand is strong in China and in Europe also our factories are ramping up," said Pankaj Mittal, chief operating officer, Motherson Sumi.