"While the overseas business continued to show weakness one time provisioning cost due to shutting down its facilities in Belgium led to the loss. The company has carried out right sizing of its facility at Belgium. The process of led to a recognition of liability of Rs 120.71 crore with respect to employee costs which have been considered as exceptional items. In addition other restructuring related costs aggregating to Rs 108.07 crore were also identified and have been accounted under appropriate operating expense heads," the company said in its filing to the Bombay Stock Exchange (BSE) today.
The restructuring is being carried out to trim costs as high cost of operations have been impacting company profitability. The company has announced it is shifting some of the manufacturing facilities from Belgium to Hungary and expects that the full impact will be realised in coming fiscal.
Excluding the one off expense the company made a loss of Rs 45.50 crore on a consolidated basis. The results were much below street estimates. Broking firms were estimating a reduced profit on account of restructuring of costs.
Crompton Greaves reported a fall in its consolidated revenue. Revenue for 3Q FY 2013 stood at Rs 2971.83 crore as against Rs 3027.95 crore in same period previous year. The power segment which contributes to over 60 percent of the company's revenue performed badly reporting a decline in revenue and profit.
"Overall Crompton Greaves business continues to be impacted due to weakness in its European subsidiaries. Its operations in India are stable and last two quarters there was an improvement in margins. We had factored company results to be impacted due to exceptional items but result is below expectation," said an analyst.