Voltas has plunged deeper into the red, posting a loss of Rs 6.98 crore in the first six months of 1997-98 against a Rs 4.9 crore loss for the same period last year. Lower sales, higher interest costs led to the bad performance. Net sales dropped by seven per cent to Rs 679.11 crore. The company, once upon a time one of the Tata group companies' blue chips, managed to post a higher operating profit of Rs 30.70 crore, 2.5 per cent higher than last year.
The loss is bad news for Voltas as the current business environment gives little hope for a recovery in its key business segments. At its annual general meeting in Mumbai, irate shareholders had demanded the head of A H Tobaccowala, the chairman for leading the company to its first ever loss.
While total expenditure dropped by 6.5 per cent to Rs 648.41 crore from Rs 693.74 crore, financial charges increased to Rs 24.83 crore from Rs 22.57 crore. Depreciation stood at Rs 11.75 crore and Rs 1.1 crore written off for VRS.
For the full year 1996-97, Voltas had posted a total loss of Rs 16.82 crore on net sales of Rs 1,469.40 core. The company, now under a new management headed by N D Khurody, is trying to set things right by hiving off businesses and concentrating on its core business of air-conditioning and precision engineering. All other businesses including that of white goods will be sold off.
The results also include a restructuring cost of Rs 1.10 crore. The company paid this amount as voluntary retirement scheme to its employees. The Tatas are expected to decide on whether to sell their holdings soon. The restructuring report for the group prepared by management consultants, McKinsey & Co has recommended that the group concentrate on its core business of steel, autos, power, telecom and services and get out of other non-core activities.
