Ador Welding, the welding consumable and equipment major has registered 26% fall in standalone sales to Rs 95.78 crore hit by lingering impact of COVID 19 lockdown. Lower sales together with operating profit margin turn negative 5.3% (compared to positive 7.9%), the operating profit was a loss of Rs 5.04 crore compared to a profit of Rs 10.16 crore. Eventually at PAT level it was loss of Rs 6.40 crore compared to a loss of Rs 9.31 crore in the corresponding previous period. But for tax write-back which was higher by 89% to Rs 2.38 crore, the fall at bottom-line would have been even steeper than reported.
- Downside in revenue was largely due to fall in revenue of both consumables and equipment business. The segment revenue of consumables was down by 19% to Rs 80.99 crore (or 84% of sales) with metal fabrication activity subdued even though there is recovery in some segment of the auto sector such as PV and 2-wheelers and tractors. However the Equipment & Project business registered sharp 48% fall in revenue to Rs 14.94 crore (or 16% of sales) as capital expenditure come to a halt and delay in execution of ongoing projects in hand.
- EBIT turned red with a loss of Rs 5.46 crore compared to a profit of Rs 11.07 crore in the corresponding previous period. Loss at EBIT was largely due to higher loss reported by Equipment & Project business. The segment profit of consumables was down by 31% to Rs 3.43 crore hit by lower sales as well as 270 bps fall in segment margin to 15.1%. On the other hand the segment loss of equipment business stood higher at Rs 17.68 crore against a loss of Rs 6.69 crore in the corresponding previous period.
Consolidated sales for the quarter wasdown by 26% to Rs 95.95 crore and with OPM being -5.0% compared to +8.0%, the operating loss was Rs 4.84 crore compared to a profit of Rs 10.29 crore. Eventually the loss at PAT level was Rs 5.64 crore compared to a profit of Rs 9.46 crore in the corresponding previous period.
Half Yearly performance
Standalone sales was down by 42% to Rs 150.64 crore and with OPM turn negative 1.9%, it was a loss of Rs 2.93 crore in the corresponding previous period. After accounting for lower OI, lower interest and higher depreciation, the PBT was a loss of 9.03 crore compared to a profit of Rs 14.53 crore. Eventually at PAT level it was loss of Rs 6.74 crore (against a profit of Rs 12.98 crore in corresponding previous period) with taxation being a writeback of Rs 2.29 crore, a swing of Rs 3.84 crore.
Consolidated sales was down by 42% to Rs 150.86 crore and the operating loss was Rs 2.71 crore (against a profit of Rs 18.77 crore) with operating margin stand negative 1.8% compared to 7.3% in corresponding previous period. Eventually the net loss was Rs 5.82 crore compared to a profit of Rs 13.30 crore in the corresponding previous period.
Other developments
During the current quarter, the Company has been made aware of certain liquidated damages and project cost overrun with respect to the delay in the execution of an overseas Engineering Procurement and Constructions (PC) project. The management believes that the impact of this should be restated in the respective lines on the financial statements / information of the previous periods. The restatement is on account of omissions of the past, which have now been taken into consideration in the relevant accounting periods to which they relate to.
The impact of the above on half year ended Sep 2020 was a loss of Rs 1.16 crore and for FY20 is Rs 1.95 crore.
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