Crompton Greaves posts Rs 107-cr loss, misses estimates

Avantha Group company Crompton Greaves posted a consolidated net loss of Rs 107 crore for the quarter ended December 31, 2015 compared to a net profit of Rs 274.29 crore for the corresponding quarter in the previous year. The loss was on account of lower sales, even as the company booked one-off gains worth Rs 30 crore during the quarter.

The performance includes the financials of the de-merged consumer products business, whose net loss of Rs 32 crore reflects in the latest results. Excluding the same, the net loss stood at Rs 75 crore compared with a profit of Rs 218 crore in the year-ago quarter.

According to a Bloomberg poll, consensus estimate for net profit was Rs 48.5 crore whereas net sales were pegged at Rs 3,243 crore.

Consolidated net sales came in at Rs 2,068 crore versus Rs 2,409 crore in the year-ago quarter, a decline of 14 per cent. Revenue from power systems decreased to Rs 1,591 crore against Rs 1,963 crore, down 19 per cent whereas industrial systems' revenue increased 4.6 per cent year-on-year to Rs 475 crore.

Apart from weak operating performance, the profit numbers were also influenced by exceptional gains.

The year ago quarter also saw exceptional gains, though much higher at Rs 267.5 crore, which helped Crompton post profit at the net level. However, for the recently concluded quarter, the loss before interest and tax (before exceptional items) stood at Rs 36 crore versus a profit of Rs 29 crore in the year ago period.

Likewise, loss before tax and exceptional items stood at Rs 59 crore versus a loss of Rs 2 crore in the year ago quarter.

The net exceptional items worth Rs 30 crore for the December 2015 quarter include profit of Rs 426 crore earned from sale of land at Kanjurmarg (Mumbai), sale of investment in associate company worth Rs 14 crore as well as provision towards advances given to its subsidiaries (including loss on sale of its Canadian operation) worth Rs 410 crore.

IN THE RED

• Revenue from power systems decreased to Rs 1,591 cr against Rs 1,963 cr in the same period a year ago  
• Industrial systems' revenue increased 4.6 per cent y-oy to Rs 475 cr
• loss before tax and exceptional items stood at Rs 59 crore versus a loss of Rs 2 crore in the year ago quarter
• Operating profit (before other income, finance costs, exchange gain/loss and exceptional items), however, stood at just Rs 8.6 crore as against Rs 62.3 crore in the year ago quarter
• The company’s stock closed 3.2 per cent lower on the BSE at Rs 167.10 on Tuesday

Nevertheless, operating profit (before other income, finance costs, exchange gain/loss and exceptional items) stood at just Rs 8.6 crore as against Rs 62.3 crore in the year ago quarter.

The company's stock closed 3.2 per cent lower on the BSE at Rs 167.10 on Tuesday. Since the results came post market hours, expect some more pressure in Wednesday's trade.

Senior Management Changes
Meanwhile, the company on Tuesday announced senior management changes. The company's chief executive officer and managing director, Laurent Demortier will step down from February 3 and he will be replaced by KN Neelkant, who was the CEO of Avantha Power and is currently an executive at Crompton Greaves.

Further, Madhav Acharya, from April 1, will join as a member of the board as an executive director finance in addition to being the CFO of the company.

The company has also appointed Jean Michel Aubertin as the CEO of the international power system business and will become a member of the international board of the company. He had joined the company a year ago.

Norberto Santiago will remain as the CEO of the international automation business and will report to the international board of the company.