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Process control and industrial automation major Honeywell Automation (HAIL) reported 19 % increase in Net sales to Rs 380.37 crore for the quarter ended December 2010. However, OPM witnessed contraction of 290 bps to 11.9 % resultant operating profits sliding by 4 % to Rs 45.38 crore. Other income declined, Interest costs reduced to nil but its effect remain muted and rise in depreciation charges saw the PBT decline by 7 % to Rs 43.91 crore. Tax increase by 47 % to Rs 18.17 crore which includes Rs 12.34 crore with respect to earlier period further aggravated the bottom-line with the net profit falling by 26 % to Rs 25.74 crore.
HAIL is a leader in providing integrated automation and software solutions with more than 2,700 employees based in eight offices in India. HAIL has five major divisions: Honeywell process solutions (HPS), Honeywell building solutions (HBS), environment & combustion control (ECC) products, sensing & control (S&C) products, and the exports business group (global services)(EBG).
Quarterly Performance
For the quarter ended December 2010, as compared to the corresponding quarter last year the net sales grew 19 % to Rs 380.37 crore. Other operating income almost doubled from Rs 19 lakh to Rs 39 lakh and the total operating income increased by 19 % to Rs 380.76 crore.
OPM crashed 290 bps to 11.9 % as staff costs increased by 112 bps to 16.47 % and other expenditure increased by 238 bps to 14.16 %, Purchase of traded goods increased 199 bps to 8.85% but raw material consumed decreased 606 bps to 44.64 %. The resultant operating profits stood at Rs 45.38 crore, down 4 %.
As compared to the corresponding quarter last year, other income was down 36 % to Rs 2.17 crore, interest costs came to zero from Rs 29 lakh but depreciation charge was up 19 % to Rs 3.64 crore. The resultant PBT fell 7 % to Rs 43.91 crore as compared to the corresponding quarter last year.
Tax provision increased 47 % to Rs 18.17 crore on the back of Rs 12.34 crore with respect to earlier periods with the effective tax rate increasing to 41.38 % against 26.15 % in the corresponding period. The resultant PAT of the company was down 26 % to Rs 25.74 crore.
Full Year Performance
For the full year ended December 2010, the net sales grew 15 % to Rs 1354.71 crore as compared to the corresponding period previous year. Other operating income increased 44 % to Rs 1.08 crore and Total operating income increased 15 % to Rs 1355.79 crore.
OPM was down 540 bps to 10.6 % over the corresponding period on the back of higher raw material prices.
As a % of sales (net of stock adjustments) raw material consumed increased 474 bps to 50.42 %, purchase of traded goods increased 139 bps to 8.37 %, stock in trade changed from increase of Rs 1.19 crore to decrease of Rs 1.72 crore whereas staff costs ware down 18 bps to 16.34 % and other expenditure decreased 75 bps to 14.13 %. The resultant operating profits fell 24 % to Rs 143.91 crore.
Other income was up 32 % to Rs 7.97 crore, Interest cost fell 87 % to Rs 8 lakh on the back of lower debt and depreciation charge increased 9 % to Rs 12.9 crore, and the resultant PBT contracted 24 % to Rs 138.9 crore.
With tax provision at Rs 33.85 crore (including Rs 3.88 crore for earlier periods) down 31 %, the effective tax rate down 266 bps at 24.37 %, the resultant net profit fell 21 % to Rs 105.05 crore.
Shareholding Pattern
As of December 30, 2010 Promoters hold 81.24 % (81.24 % at end of sequential quarter) and there was no pledging of shares done by promoters.
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