Kirloskar Brothers (KBL), one of the leading players in the Indian pump market, has registered a net loss of Rs 20.64 crore for the quarter ended March 2012. The net loss for the quarter was largely on account of provision of Rs 63.32 crore towards doubtful/irrevocable claims for the quarter compared to advance written-off (to subsidiary) of Rs 67.47 crore in Q4FY11. On lower operating profit [due to steep contraction in margin (down 750 bps) over and above lower sales] the almost flat one off item (down just 6% yoy) has turned the bottom-line red. But for tax write back of Rs 12.70 crore during the quarter (provision of Rs 22.20 crore in Q4FY11) the loss at net level would have been much higher.
- Value of production for the quarter was lower by 28% to Rs 505.21 crore and the sales excluding other operating income was lower by 28% to Rs 518.80 crore.
- Sharp contraction in operating margin to the extent of 750 bps to 9.9% seems on account change in product/project mix along with inadequate coverage of fixed cost with sharp fall in sales. While the material cost as proportion to sales was lower by 710 bps to 30.4% that of traded goods surged up by 1010 bps to 38.7%. Further the staff cost and other expenses were higher by 160 bps (to 7.7%) and 300 bps (to 13.1%) respectively denting the operating margin.
- Other income was lower by 89% to Rs 0.49 crore, the interest cost was higher by 23% to Rs 14.76 crore and depreciation was lower by 3% to Rs 7.73 crore. Thus the PBT before EO was lower by 73% to Rs 29.97 crore
- EO Exp was Rs 63.32 crore for the quarter compared to Rs 67.47 crore in corresponding previous period. Taxation was a write back of Rs 12.70 crore compared to a provision of Rs 22.20 crore. Thus at net level it was a loss of Rs 20.64 crore compared to a profit of Rs 20.53 crore in corresponding previous period.
Annual performance
Sales for the period was lower by 8% to Rs 1781.88 crore and the operating profit was lower by 39% to Rs 144.68 crore with OPM contract by 410 bps to 8.1%. The PBT before EO was lower by 64% to Rs 62.23 crore after accounting for lower other income, higher interest and depreciation cost. EO (net) was an expense of Rs 28.26 crore compared to an expense of Rs 72.30 crore in corresponding previous period. EO for current fiscal is net of profit on sale of its 100% investment in Gondwana Engineers to Dohion Veolia Water Solutions for Rs 47.44 crore. Thus the PBT after EO was lower by 67% to Rs 33.97 crore. The taxation was lower by 93% to Rs 2.78 crore. Thus the PAT was lower by 49% to Rs 31.19 crore.
Consolidated annual performance
Sales was lower by 4% to Rs 2554.46 crore and the operating profit was lower by 33% to Rs 208.12 crore with OPM skid by 350 bps to 8.1%. Eventually the PAT (before minority interest) was lower by 48% to Rs 50.62 crore after accounting for an EO expense of Rs 28.26 crore for the fiscal compared to a expense of Rs 67.47 crore in corresponding previous period.
The consolidated financials for current fiscal excludes the operations of Gondwana Engineers which ceased to be subsidiary from April 1, 2011 but include the results of SPP Pumps (MENA) LLC for the period between Sep 13, 2011 to Dec 2011. The current fiscal figures also include the full year financials of Micawber 784 (proprietary) and Braybar Pumps (proprietary) as subsidiaries unlike which is for part of the year i.e April 26, 2010 and April 29, 2010 respectively. Similarly that of Kirloskar Systech is for full year compared to part of the year in FY11.
Other developments
To pay final dividend of Rs 2 (100%) for each equity share of Rs 2 face value for 2011-12. This is subject to shareholders approval.
The stock hovers around Rs 137.05.
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