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For the second quarter ended March 31st 2008, New Orders stood at Rs. 23,422 million, an increase of 20% over the corresponding period in the previous year and Sales Turnover remained steady at Rs. 21,424 million despite discontinued operations of three businesses and an accounting adjustment relating to construction contracts, which has for the latter resulted in a reduction of turnover of Rs. 1166 million in the last quarter. The company has also booked a provision of Rs. 1098 million for estimated losses on certain large projects. As a direct consequence, the PBT and PAT declined significantly over the corresponding period in the last quarter.
In the last fiscal corresponding to the reported quarters, Siemens had three businesses that were subsequently transferred to separate Siemens companies or sold. As a result, the revenues from these operations are no longer reflected in the books of Siemens Ltd. in the current year of operations. These pertain to the Enterprise Communication & Building Technologies business which moved into separate entities, as well as Automotive business which was sold under a global arrangement. Additionally, in the current quarter, the company has made a reversal in turnover as a consequence of a revised cost estimate as per the Percentage of Completion (POC) accounting.
In view of the above special situation, for the second quarter ended March 31, 2008, Sales Turnover increased marginally by 1% to Rs. 21,424 million as compared to Rs 21,292 million for the corresponding period in the previous year, whereas for the half-year period, Sales Turnover rose by 8% to Rs. 40,568 million as compared to Rs. 37,561 million in the corresponding period last year. However, after removing the above effects, the turnover increased by 11% for the quarter and by 17% for the half year on a comparable basis over last year’s respective corresponding periods.
New Orders intake for the quarter ended March 31, 2008 stood at Rs. 23,422 million as compared to Rs. 19,477 million in the corresponding period of the previous year, an increase of 20%. The major growth drivers were the Automation and Drives and Industrial Solutions and Services businesses. For the half-year period ended March 31 2008, New Orders stood at Rs 42,542 million as compared to Rs 70,752 million in the corresponding period last year, which included a mega order of approximately Rs. 37,900 million. After removing this single large order and adjustments for discontinued operations, the order position on a comparable basis increased by nearly 38%.
The Profit Before Tax for the quarter ended March 31, 2008 stood at Rs. 71 million as against Rs. 1730 million recorded during the corresponding period in the previous year. In anticipation of estimated losses on contracts under execution, the company has made a provision of Rs. 1098 million which has created a one-time impact on the results. Correspondingly, the PBT for half-year ended March 31, 2008, stood at Rs 2,860 as against Rs. 3,137 in the similar period in the last year.
As a consequence of the provision booked as explained above, the Company’s Profit After Tax (PAT) stood Rs 17 million for the quarter ended March 31 2008, whereas for the half-year ended March 31, 2008, PAT stood at Rs 1987 million as compared to Rs 2,061 million in the corresponding period of the previous year.
The Company’s Unexecuted Order Value position as of March 31, 2008 was Rs. 95,683 million. (Last fiscal: Rs. 108,839 million).
As of March 31, 2008, Siemens Ltd. had 6081 Employees (As of March 31, 2007: 6,296).
Commenting on the Q2 results, Dr. Armin Bruck, Managing Director, Siemens Ltd. said, “While our sales revenues have grown satisfactorily in line with the market growth, the figures are not strictly comparable as we have moved two businesses into separate companies and have sold our automotive business as part of a global deal. This quarter, our profitability has taken a one-time hit mainly due to a provision that we have made for anticipated losses on certain projects. However, we have already charted out corrective measures for better risk management in future. Going forward, we are confident that we will able to deliver results within the planned corridor for the year-end. Our goal of “Go for 2” is well on track as we have a robust strategy to double our business by 2010.
He further added, “The Indian economy is currently going through a correction phase and the business sentiment is cautiously optimistic. The industry overall is experiencing cost pressure due to the rising inflation and the consequent rise in commodity prices. The appreciating Euro currency and slowdown in the global markets has created temporary setback as we see new investments in projects are getting marginally delayed. We are confident that this is a transitory phenomenon and the markets will bounce back in the weeks ahead.
Siemens Ltd is the flagship listed company in India. Siemens in India, which comprises of 18 legal entities, is a leading provider of industry and infrastructure solutions with a business volume aggregating about Rs 11,000 crores. It operates in the core business areas of Energy, Industry and Healthcare. It has nation-wide Sales and Service network, 18 manufacturing plants and a network of around 500 channel partners and employs more than 18,000 people.