Financial Daily from THE HINDU group of publications
Friday, Nov 01, 2002
Corporate Results - Hardware
Corporate - Outlook
Moser Baer net profit drops; cuts forecast
NEW DELHI, Oct. 31
MOSER Baer India Ltd (MBIL), a global major in compact and floppy disk manufacture, has announced a marginal drop in net profit for the second quarter and lowered its forecast for the fiscal.
MBIL, whose shares fell by Rs 39.50 to Rs 158.15 on the Bombay Stock Exchange after the results, cited increase in fixed costs related to a new facility and delay in expanding capacity as the reasons for drop in net profit and cutting forecast respectively.
Net profit of the company for the quarter ended September 2002, stood at Rs 53.14 crore as compared to Rs 54.13 crore in the corresponding quarter last year. Turnover was, however, was up by 29 per cent at Rs 215.8 crore from Rs 166.8 crore a year ago.
MBIL said it is lowering its growth projections for the current fiscal to 10 per cent from the earlier projected growth of 23-27 per cent.
"This change in guidance is a result of the decision taken by the board of directors to delay expansion of CDR capacity by a quarter at Greater Noida. This will provide flexibility to the management to create CDR capacity in any alternative location in an unlikely event of any adverse outcome of the ongoing anti-dumping investigation by EC," MBIL said in a statement.
The floppy diskette business suffered a fall of 30 per cent in the quarter since customers built up inventory in anticipation of announcement of the anti-dumping duties.
"Subsequent to MBIL being cleared, these customers cleared this inventory, resulting in a 30 per cent fall in our floppy diskette sales... " it said.
During the quarter, the industry witnessed increase in key inputs costs, including plastics, shipping freight etc., the cumulative impact of which increases the raw material costs by 10-15 per cent for the remaining part of the year, MBIL said.
Increasing manufacturing efficiencies and cost reduction measures undertaken during the year should largely offset the negative impact of this increase in input costs, the company said.
On the anti-dumping inquiry initiated by the European Commission (EC) regarding exports of CDRs into the European Union in early 2002, MBIL said it is fully cooperating with the EC in the investigation process.
The provisional EC findings will be published by February 2003. On prices of its products, MBIL said the average selling price declined by 3.5 per cent in the quarter on account of increase in bulk packaged sales, which accounted for 33 per cent of the total sales, up from 16 per cent at the end of the last fiscal.
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