Companias

T

During 2004-05, SCI has reported a robust financial performance. Its income from operations rose by 15.8 per cent over the same period of the previous year to Rs 3,396 crore. Net profit shot up by 126 per cent over the same in 2003-04 to Rs 1,419 crore. During the year under review, SCI’s earnings in foreign exchange reported an increase of 9.7 per cent over the figure in 2003-04 to Rs 3,406 crore.

SCI owns 22 bulk carriers with an average age of 16 years, comprising one Paramax, 15 Handymax and six Handysize vessels. Out of 11 LR-1 tankers, eight tankers operated with the oil industry, while three tankers were utilised on cross trade for shipments of fuel oil on a charter basis. One vessel has been scrapped during the year under review. For its fleet expansion, SCI took delivery of one Suezmax ‘Desh Shakti’ and one very large crude carrier (VLCC), the ‘Desh Ujaala’ tanker. SCI has received a 9 million tonne crude oil transportation contract from Indian Oil Corporation to transport its crude oil from the Persian Gulf to the Indian coast.

After the government’s approval, SCI has signed contracts with Daewoo Shipbuilding and Marine Engineering Company of South Korea for building and delivering two VLCCs with a capacity of 3,00,000 dead weight tonne at a total cost of Rs 1,136 crore. This would augment SCI’s crude oil tanker tonnage and help to meet the increased demand for crude oil transportation in the future. The ministry of shipping has cleared the SCI’s proposal to acquire 16 new vessels worth Rs 2,868 crore.

SCI witnessed a decline in profitability for the first three quarters of 2005-06, mainly due to a fall in ocean freight rates. For the quarter ended June, its net sales declined by 2 per cent over the same period of the previous year to Rs 812 crore. Likewise, net profit suffered by 14 per cent to Rs 274 crore. During July-September 2005, the company’s net sales decreased by 4 per cent over that in July-September 2004 to Rs 740.7 crore. Net profit went down by 28 per cent over the same period of the previous year to Rs 150 crore. For the quarter ended December 2005, the freight rates of vessels such as VLCCs, Suezmax, Aframax and clean tankers, etc, have posted a sharp fall. The company’s net sales dropped by 0.2 per cent to Rs 927 crore during the third quarter of 2005 and net profit fell by 4 per cent over the same period of the previous year to Rs 268 crore.

ll1

VOLTAS

V

Despite tough competition from multinational companies, Voltas sustained its pursuit of active growth in its businesses. During 2004-05, its net sales rose by 8.9 per cent over that in 2003-04 to touch Rs 1,386 crore. Net profit increased by 29 per cent over the same period of the previous year to Rs 50 crore. The company’s earnings in foreign exchange went up by 24 per cent to Rs 80 crore. In gross sales, the share of electro-mechanical projects and the services segment stood at 56 per cent, followed by unitary cooling products with 29 per cent; other businesses added 8 per cent, and engineering agency and services contributed 7 per cent.

The company continued its thrust in overseas markets, particularly in west Asia. It has successfully completed certain contracts, such as the Conference Palace Hotel project in Abu Dhabi and metro railway and science park building projects in Hong Kong. Voltas has won two major mechanical and electrical contracts – for the Burj Tower in Dubai and the Hyderabad international airport. The contracts valued at around Rs 1,339 crore are scheduled to be completed by December 2008.

The company is planning to invest Rs 120 crore over the next three years for setting up three manufacturing units in Uttaranchal to manufacture air conditioners, central cooling plants and commercial refrigeration equipment. The company’s new air conditioner manufacturing plant in Uttaranchal would have a capacity of five lakh units per year, while the central cooling plants would have a capacity of 20,000 units in the first year, which would be scaled up to 50,000 units in full operation. The commercial refrigeration units will have a capacity of one lakh units from the first year of operations itself. The new units will be operational by mid-2006.

Voltas has started the valuation process to sell-off its loss-making Hyderabad unit and has announced a voluntary retirement scheme for all the 3,500 employees, the compensation amount being Rs 65 crore. This unit has been making losses for the past 12 years, except during 2000-02, after it stopped manufacturing refrigerators for LG and Samsung. The company is in the process of shifting its Hyderabad operations, engaged in making retail coolers for food products, to Pantanagar in Uttaranchal.

Voltas has posted strong financial results for the first three quarters of 2005-06. For the six months, April-September 2005, the company’s net sales surged by 45 per cent over the same period to Rs 931 crore of the previous year. Net profit shot up by 77 per cent over the same period to Rs 35 crore. During October-December 2005, its net sales increased by 51 per cent over the corresponding period of the previous year to Rs 435 crore. Net profit rose by 49 per cent over the same period to touch Rs 11 crore.

ll1

Economic and Political Weekly February 11, 2006

Restoring Profits

R

Raymond suffered a decline in profitability during 2004-05. Its net sales rose by 12 per cent to touch Rs 1,115 crore over 2003-04. However, net profit declined by 41.7 per cent to Rs 76.8 crore. During the year under review, the textile division’s total sales accounted for Rs 757.6 crore, a rise of 8.7 per cent over the same period of the previous year. The denim division recorded a 21 per cent jump in total sales to Rs 222 crore. The company’s earnings in foreign exchange increased by 9 per cent to Rs 265 crore.

Raymond’s R&D department has developed various new products under the textile division, like the Tasmania collection, Royal Crest, Linen World, Nanotex, Explorer, etc. Its textile division has adopted the latest technology in spinning, by introducing compact spun technology, thereby producing less hairy and more uniform yarn. For producing light-weight suiting fabrics, it has installed a single sizing machine for sizing single yarn. It has opened three new retail shops in UAE, Saudi Arabia and Bangladesh. The company also signed a joint venture with Lanficio Fedora of Italy for manufacturing, selling and distributing blankets, carded woollen fabrics and shawls.

Raymond’s files and tools division has entered into a memorandum of understanding with MOB Outillage SA, a well known hand-tool manufacturer of France for setting up a joint venture company to manufacture steel files and rasps at Chiplun, Maharashtra at a total project cost of Rs 20.7 crore. Recently, Raymond has acquired a 69 per cent share in Ring Plus Aqua, an automotive component maker, through its wholly-owned subsidiary, Scissors Engineering Products, at a total cost of Rs 21 crore.

Raymond has witnessed healthy results for the first nine months of the current financial year. Net sales have risen by 14 per cent over the corresponding period of the previous year to Rs 940 crore, while net profit has shot up by 122 per cent to

Notes: – not available; P/E multiples are the latest with corresponding last year’s figures. touch Rs 86 crore.

Economic and Political Weekly February 11, 2006