Interviews
News Flash
Sales in consumer textiles division at SKNL grow by 21.4%
02 Jul '09
5 min read
Staff costs in FY2009 stood at Rs. 730.6 million versus Rs. 420.5 million in FY2008. Increase in staff costs has been caused by a general increase in wage cost over previous year and increase in scale of operations both in manufacturing and distribution. Further, Leggiuno's staff cost have also been consolidated with the Company's results. Given that Leggiuno is an Italian company its staff costs are relatively higher than that of SKNL; this has been reflected in the increase in staff cost.
Selling and distribution expenditure, that includes advertising costs, increased 28.4% to Rs. 1,138.8 million from Rs. 887.1 million on the back of larger scale of operations and greater focus on advertisements and brand building. This has significantly helped the company to achieve over 29% increase in turnover in the backdrop of subdued market conditions. The Company writes off all brand building and advertisements costs as incurred and although expensive these initiatives have long term benefits in terms of brand equity and brand recall.
EBIDTA
EBIDTA during the year stood at Rs. 4,880.9 million compared to Rs. 4,037.9 million, an increase of 20.9%. Margins for the year under review stood approximately at 21.6%. Although operating margins marginally dampened compared to 23.1% delivered FY2008, it is important to point out that the Company has been successful in enhancing volumes across products while keeping costs largely flat even in the challenging market environment prevalent today; this has resulted in a delivery of a healthy EBIDTA. The addition of Leggiuno including the initial cost of integration and business consolidation and a number of promotional sales carried out during the last quarter of CY2008 and first quarter of CY2009 also influenced the Company's margin performance.
Depreciation
Depreciation, during the year, increased by about 3.8% to Rs. 442.1 million compared to Rs. 426.1 million in FY2008. This is owing to higher depreciation charges incurred on the expanded manufacturing capacity of RTIL. The consolidated depreciation cost for the year also includes the depreciation cost of Leggiuno.
Interest Cost
Owing to the funds raised for the development of the new High Value Fine Cottons (HVFC) facility and the consciously planned strategic exit of SKNL from Corporate Debt Restructuring (CDR) status, the interest cost for the year increased by 55.4% to Rs. 1,388.1 million versus Rs. 893.3 million in FY2008. Although CDR enables low cost of debt, the Company has taken a strategic step to exit CDR to increase corporate flexibility and enable unconstrained decision making that was dampened because of this status. As a result the Company has moved to market-led rate of interest cost versus concessional interest rates enjoyed under the CDR scheme.
PBT
In FY2009, PBT increased by about 11.4% to Rs. 2,913.4 million from Rs. 2,616.4 million.
Click here to view more:
Selling and distribution expenditure, that includes advertising costs, increased 28.4% to Rs. 1,138.8 million from Rs. 887.1 million on the back of larger scale of operations and greater focus on advertisements and brand building. This has significantly helped the company to achieve over 29% increase in turnover in the backdrop of subdued market conditions. The Company writes off all brand building and advertisements costs as incurred and although expensive these initiatives have long term benefits in terms of brand equity and brand recall.
EBIDTA
EBIDTA during the year stood at Rs. 4,880.9 million compared to Rs. 4,037.9 million, an increase of 20.9%. Margins for the year under review stood approximately at 21.6%. Although operating margins marginally dampened compared to 23.1% delivered FY2008, it is important to point out that the Company has been successful in enhancing volumes across products while keeping costs largely flat even in the challenging market environment prevalent today; this has resulted in a delivery of a healthy EBIDTA. The addition of Leggiuno including the initial cost of integration and business consolidation and a number of promotional sales carried out during the last quarter of CY2008 and first quarter of CY2009 also influenced the Company's margin performance.
Depreciation
Depreciation, during the year, increased by about 3.8% to Rs. 442.1 million compared to Rs. 426.1 million in FY2008. This is owing to higher depreciation charges incurred on the expanded manufacturing capacity of RTIL. The consolidated depreciation cost for the year also includes the depreciation cost of Leggiuno.
Interest Cost
Owing to the funds raised for the development of the new High Value Fine Cottons (HVFC) facility and the consciously planned strategic exit of SKNL from Corporate Debt Restructuring (CDR) status, the interest cost for the year increased by 55.4% to Rs. 1,388.1 million versus Rs. 893.3 million in FY2008. Although CDR enables low cost of debt, the Company has taken a strategic step to exit CDR to increase corporate flexibility and enable unconstrained decision making that was dampened because of this status. As a result the Company has moved to market-led rate of interest cost versus concessional interest rates enjoyed under the CDR scheme.
PBT
In FY2009, PBT increased by about 11.4% to Rs. 2,913.4 million from Rs. 2,616.4 million.
Click here to view more:
S Kumars Nationwide
Popular News
Leave your Comments
Editor’s Pick
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
