Commercial vehicle company, Ashok Leyland, the Hinduja Group flagship company in India, has reported a 42.6 per cent drop in net profit in the first quarter of 2008-09 to Rs 50.6 crore. A release from the company said the reported loss was due to adverse exchange movement (necessitating recognition of losses on ‘mark to market’ basis, on loans in foreign exchange) that had an impact of Rs 33.9 crore coupled with an increase in input costs.
For the corresponding period in the previous year, figures recognised a ‘mark to market’ gain of Rs 19.7 crore.
During the first quarter however the company reported a 16.2 per cent increase in turnover to Rs 1883.9 crore (Rs 1621.1 crore).
Sale of vehicles for the quarter was 18,425 units (18,163) with domestic volume at 17145 units (16,739 nos.) and international operations contributing 1280 units (1424 units). “Although vehicles sales remained relatively flat, turnover was buoyed by a substantial increase in our engine and spare parts businesses,” said R Seshasayee, managing director, Ashok Leyland. “Turnover has also benefited from better domestic realization and pricing actions,” he added.
The company’s profit before financial expenses, extraordinary item and before tax came down to Rs 85.2 crore (Rs140.6 crore).
Financial expenses dropped by 16.4 per cent to Rs 10.7 crore as against Rs 12.8 crore during the corresponding period in the previous year, due to adoption of favourable funding mix.
“The spiraling interest rates and inadequate finance availability for new vehicle purchases have affected the sentiment in the vehicles market. However, nothing has changed in our optimism for the medium and long term. Therefore, we are proceeding with our investment plans,” said Seshasayee.
