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For the quarter ended Sept 2013, Hitachi reported a standalone sales turnover of Rs.161.63 crore, which was up 16%, bucking the overall weak trend in the home appliances industry. Bottomline turned negative with the company reporting a Net loss at Rs.7.11 crore, versus a nominal profit of Rs. 0.29 crore compared to the corresponding previous quarter. Operating margins increased a marginal 19 bps to 0.7% primarily due to a 381 bps fall in Raw Material expense to 33.1% of net sales; partially offset by a corresponding increase in other expenses. Other Income was Rs. 2.58 crore, 225% better than Rs.0.79 crore in the corresponding previous quarter. Depreciation expense registered a high 52% increase to Rs.6.51 crore compared to the corresponding previous quarter figure of Rs.4.29 crore. Interest Costs also increased a huge 314 bps to Rs.3.83 crore compared to Rs.0.92 crore in the corresponding previous quarter.
For the quarter ended Sept 2013, Hitachi's EBITDA margin remained weak at 0.7%, although higher 19 bps compared to the corresponding previous quarter. Raw Material expense decreased 381 bps to 33.1% of Net sales compared to 36.9% in the corresponding previous quarter. However Purchase of stock in trade increased 36 bps to 28.5% of the Net sales, and Staff costs increased 90 bps to 10.7% of the Net sales. Other expenses (which include Power & Fuel, Advertisement, Royalty and other Misc. expenses) increased a substantial 232 bps at 26.9% of Net Sales compared to 24.6% in the corresponding previous quarter. Tax credit increased to Rs.4.01 crore compared to a credit of Rs. 0.42 crore in the corresponding previous quarter.
Wafer-thin operating margins, higher interest and depreciation costs and a Forex loss of Rs.4.52 crore (versus a Forex gain of Rs.3.55 crore in the corresponding previous quarter), led to the company reporting a Net loss at Rs.7.11 crore.
Financial Performance for the six-month period ended September 30, 2013
For the six-month period ended September 30, 2013, Hitachi reported a Total Operating Income of Rs.633.83 crore, an increase of 23%. Operating margin declined 131 bps YoY to 6.4% due to a huge 235 bps increase in Raw Material expense to 48.1% of Net sales. However, purchase of stock in trade declined 268 bps to 13.8% of the Net sales. Staff costs increased 93 bps to 6.8% of the Net Sales compared to 5.9% recorded in the corresponding previous quarter. A 23% increase in Net sales more than offset the fall in Operating Margins and thus Operating profit increased a nominal 2% to Rs.40.57 crore.
Other income decreased by 234% to Rs 3.84 crore; however interest cost too increased 90% to Rs 6.85 crore. Depreciation grew by 50% to Rs 13.67 crore. Forex loss increased 66% to Rs.14.70 crore. The total tax outgo decreased 62% to Rs 2.08 crore, and Net Profit too declined 49% to Rs.7.12 crore as compared to Rs.13.90 crore in the corresponding period of last year.
Other announcements
- During the quarter the insurance claim (on fire at its Kadi-Mehsana, Gujarat located plant on 18 Jul 2012) has been settled and gain arising out of such settlement of Rs.85 lakhs has been included in other income. In previous quarters the company has already received Rs.70 crore in insurance claims.
Promoters Holding
- As of 30 Sept 2013, promoters' holding remained unchanged at 74.25% compared to previous quarter. No shares of Hitachi are pledged.
- The scrip closed down 1.28% to 112.05 as of market close on Oct 28, 2013.
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