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Electrolux Kelvinator reduces losses in Q1 — Rights issue fully subscribed

Our Bureau

New Delhi , May 5

AFTER going through a period of restructuring and rightsizing, Electrolux Kelvinator Ltd (EKL), the Indian subsidiary of AB Electrolux Group, has achieved a 42 per cent sales growth in volume terms and 49 per cent growth in value terms in the first quarter of the current year. The company's sales in value terms increased to Rs 97.56 crore from Rs 65.45 crore for the corresponding period last year.

The company has reduced its losses for the three months period ended March 31, 2004 to Rs 27 crore from Rs 44 crore during the corresponding period last year.

During the first quarter ending March 31, 2004, Electrolux's EBIDTA (earnings before interest, depreciation, tax and amortisation) before exceptional items improved by 52 per cent. The improvement in EBIDTA has been primarily on account of improvement in product mix, reduction in direct material costs, benefits of stiff cost control measures by management and benefits of restructuring measures taken by the management, according to a company communiqué.

The company's Rs 200-crore (approximately) rights issue has been fully subscribed on April 26, 2004, it said. The company will now focus on new product development, a market expansion programme, a brand building exercise, and strengthening its R&D capabilities.

According to Mr Rajeev Karwal, Managing Director and CEO, EKL, "With the rights issue fully subscribed we will have substantial funds to continue our planned turnaround strategy. We will further strengthen our position by brand building, a new product development programme and will emerge as the most innovative appliances brand in the country that understands its customers.

"The company is hitting its milestones for a turnaround. The expanded product range has increased the company's presence across all the four product categories - refrigerators, washing machines, microwaves and air conditioners. The rightsizing process is also near its successful completion," he added.

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