Financial Daily from THE HINDU group of publications
Tuesday, Jan 29, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jan 29, 2002 |
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Corporate Results
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Automobile Components Wage costs, VRS payments hit Sundram Fasteners net Our Bureau
CHENNAI, Jan. 28 AN incidence of VRS payments and an increase in wage costs due to an agreement with the workers have caused a dip in Sundram Fasteners' net profit for the nine-month period ended December 2001. The company's net declined 15.75 per cent to Rs 22.78 crore in the first nine months of the current year, from Rs 27.04 crore in the same period last year. Compensation and gratuity expenses under an early retirement scheme amounted to Rs 2.32 crore, as against nil during the first nine months of last year. However, in the fourth quarter of last year, the company incurred an expenditure of Rs 5.06 crore on this count. Besides, the company had entered into a wage settlement for its employees at the Hosur plant. In the quarter ended December 2001, domestic sales at Rs 85.11 crore were 6.5 per cent lower than Rs 91.04 crore achieved in the corresponding quarter last year. Exports rose to Rs 21.19 crore from Rs 16.94 crore previously— the jump in exports has therefore come during the third quarter. Net profit for the quarter declined to Rs 7 crore from Rs 7.86 crore previously. Company sources said that interest costs had declined, thanks to softening of interest rates in the market. Interest charges for the quarter were Rs 2.70 crore as against Rs 4.75 crore for the corresponding quarter of last year. Similarly, during the nine-month period under comparison, interest cost slid to Rs 9.86 crore from Rs 12.75 crore previously. The rise in wage costs (both recurring and VRS) is likely to be counter balanced by some increase in exports— which, in turn would be partly due to the rupee devaluation— as well as some saving in interest costs. Thus, the company expects its full year net profit to be about the same as last year's Rs 28.78 crore. In the first nine months of the current year, domestic sales fell 2.32 per cent to Rs 255.90 crore from Rs 262 crore in the same period last year. Export sales, however, rose to Rs 60.54 crore, as against Rs 56.80 crore previously.
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