We are confident that growth strategies in each of our business units along with a unique business model will continue to service our long-term goals of growth and performance.”
Financial Performance Review
Revenues
In the quarter under review, SKNL's net sales grew 67.5% mainly driven by enhanced performance reported by RTIL and Belmonte and significant contribution from International business. There has been volume improvement in key SBUs namely Consumer Textiles, Luxury Textiles, and Total Wardrobe Solutions (TWS). The joint venture with DKNY for the global menswear licence of the DKNY brand is expected to contribute to revenues in the coming quarters. The Baruche Superfine Cotton - 12.75 million meters per annum state-of-the-art HVFC facility has started delivering results as the operations stabilized during the quarter. Overseas subsidiaries contribution to the total sales of the Company has been Rs. 3,290.4 million in Q1 FY2011.
EBIDTA
EBIDTA margins during the quarter were at 18.9%. Initiatives to improve sales from high margin brands like Belmonte and Reid & Taylor will help improve margins going forward. EBIDTA margins from the overseas businesses have grown to 5.2% from 4.2%.
Depreciation
Depreciation increased by about 96.2% owing to depreciation charges incurred on the BSFC plant in Gujarat and capitalisation during FY2010. Consolidation of Leggiuno and HMX has also added to the depreciation cost.
Interest
Interest cost has gone up in tune with the increase in the turnover. Interest charges stood at Rs. 732.7 million. As the Company is growing, working capital requirements have expanded resulting in higher interest expenses. The Company has also availed Term Loans on its various growth plans including overseas acquisitions.
Net Profit
Profit after tax but before minority interest has grown at the rate of 25% on a Y-o-Y basis mplying a robust earnings performance. The minority interest pertains to GIC's investment in RTIL. Earnings have improved on the back of improved volumes as well as margins from the domestic as well as international businesses.
Mr. Jitender Balakrishnan, Former Deputy Managing Director, IDBI Bank has joined the SKNL Board as a Non-Executive Independent Director. SKNL has also strengthened the Reid & Taylor Board. Mr. Nasser Munjee has joined the board as Non Executive Chairman, while Mr. Pradip Shah as been appointed as an additional Independent Director. SKNL holds 74 percent in Reid & Taylor and 26 percent with Singapore Government Investment Corp.
S. Kumars Nationwide Limited ( SKNL)
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