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Saturday, Apr 25, 2009
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Business Daily from THE HINDU group of publications Saturday, Apr 25, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Financial Performance Corporate Results - Cars Web Extras - Outlook
Mr Shinzo Nakanishi, Managing Director and CEO, Maruti Suzuki, and Mr Ajay Seth, CFO, at a press conference in the Capital on Friday. Our Bureau New Delhi, April 24 Maruti Suzuki India Ltd on Friday announced its fifth straight drop in quarterly net profits – down 18 per cent despite a 30 per cent growth in total income, with increased raw material costs and forex fluctuations offsetting gains from higher car sales. The country’s largest carmaker forecast a difficult year ahead.
The board of directors has recommended a dividend of Rs 3.50 a share (70 per cent). Full-year net dips 30%
During fiscal 2008-09, the company reported a dip in profits for the first time in eight years. Net profits plunged 30 per cent to Rs 1,218.74 crore, even as net sales increased 14 per cent to Rs 20,358.28 crore , the highest ever in the company’s history. Cumulative car sales for the fiscal were up 4 per cent at 7,92,167 units. “The auto industry faced a lot of challenges… commodity prices went up sharply and remained high for most part of the year. Forex fluctuations were also adverse and impacted the bottomline significantly,” Mr Shinzo Nakanishi, Managing Director and CEO, said. ‘Investments on track’The company said it will invest Rs 1,800 crore this year on new model launches and plant upgradation. Mr Ajay Seth, Chief Financial Officer, said margins are expected to improve this year due to higher exports and lower prices of raw materials such as steel and aluminium. Mr Nakanishi said that Maruti Suzuki will buy more parts locally to offset any adverse impact of foreign currency fluctuations. “Material costs were still quite high as commodity price benefit comes with a lag effect… The balance part of this benefit will only come starting from the first (April-June) quarter of 2009-10,” Mr Nakanishi said. Maruti Suzuki, which began selling the A-Star in November, will introduce the Ritz, another small car model, in May .
During the fourth quarter, the carmaker reported a 67 per cent jump in exports at 25,153 units on demand for its ‘A-Star’ small car in Europe, where it is sold as the Suzuki Alto. Exports accounted for 11 per cent of the company’s total sales in the quarter, compared with 7.4 per cent a year earlier. Mr Nakanishi said Nissan Motor Company is likely to source about 30,000 ‘A-Star’ cars from Maruti Suzuki in the current fiscal for sale in overseas markets. Nissan already sourced 2,000 units of the ‘A-Star’ this year as part of a contract manufacturing pact, he said. Shares of the company closed 0.3 per cent up at Rs 802.25 on the BSE, compared with a 1.7 per cent gain in the benchmark index on Friday. Maruti sales up 22% in March Auto sales zoom in Feb, but cos wary of bumps ahead Maruti bucks trend with highest-ever car sales in Jan More Stories on : Financial Performance | Cars | Maruti Udyog Ltd | Outlook
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