LAL ends 3Q with a PBT of Rs. 673 m
Lanka Ashok Leyland (LAL) ended the third quarter with a resilient
9-month profit before tax of Rs. 673 million.
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Umesh
Gautam |
Concluding a difficult 2012, Lanka Ashok Leyland ended the third
Quarter posting a resilient 9-month net profit before tax of Rs. 673
million, against a severe exchange rate loss and interest expenses. A
stark comparison to the same period in 2011 shows a net profit before
tax of Rs. 1.3 billion.
The results reflect the contrast in economic climates that prevailed
in the last two years.
Despite a 50% drop on the bottom line, a closer look reveals an
encouraging and resilient top line performance with revenues falling
only 18% to Rs. 8.7 billion from Rs. 10.6 billion for the same period in
2011.
Generators sales and vehicle repair income rose 38% over the
comparable 9-month periods. Gross profit margins fell to 7.5% from 12.8%
as a result of the devaluation of ruppee over the period.
Boosted by a 146.3% increase in other operating income of Rs. 451
million, posted a PBIT margin of 9.8% compared to 12.9% for the 9-month
period in 2011. Operating costs increased 67.6% to Rs.235.9 million from
Rs. 140 million over the comparable periods. Umesh Gautam, CEO of Lanka
Ashok Leyland said that high borrowing rates tied to an increase in
inventory resulted in interest expenses increasing over an astronomical
1253% to Rs. 189 million from a mere Rs. 14 million over comparable
9-month periods. A lower profit before tax resulted in a proportionately
lower tax contribution of Rs. 188 million for the nine months ending
December 31, 2012.
The performance of the quarter ending December 31, 2012 faired the
poorest for the company with revenue falling by over 50% to Rs.1.7
billion against 3.6 billion for 3Q 2011.
Furthermore, interest expenses were an astronomical Rs. 117.6 million
for the quarter, constituting almost 62% of the entire 9 million finance
cost.
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