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Textiles biz of Aditya Birla Nuvo posts satisfactory results

29 Apr '09

7 min read

• In the garments business, revenues remained flat at Rs. 273.3 crore during the quarter. Continued weak demand and prolonged discounting affected growth particularly in the wholesale channel. Sales from retail channel registered a robust 22 per cent growth. Controlled retail space stands expanded to 7.8 lakh square feet across 340 exclusive brand outlets (EBOs), five 'Peter England People' stores and one exclusive 'The Collective' store. Substantial cost cutting measures have already been taken to ensure savings of around Rs 100 crore in the next year.

During the year, the company's consolidated net sales grew by 26 per cent to Rs. 14,200.4 crore from Rs. 11,249.6 crore achieving growth across the businesses except for IT services and textiles.

The company's standalone net sales during the year rose by 22 per cent to Rs. 4,687.6 crore from Rs. 3,842.3 crore, largely driven by the fertilisers and the carbon black businesses. During the fourth quarter, standalone net sales grew from Rs. 1,102.3 crore to Rs. 1,152.7 crore.

Investment phase of growth businesses coupled with impact of economic slowdown on few businesses constrained profitability

During the fourth quarter, standalone net profit de-grew to Rs. 26.4 crore from Rs. 70.5 crore due to a subdued performance in the carbon black and the garments businesses. While fertilisers business posted its best ever profitability; the rayon, insulators and textiles businesses posted satisfactory results amidst higher input and fuel costs. Standalone net profit, during the year, de-grew to Rs. 137.4 crore from Rs. 243.1 crore.

Consolidated net loss, during the fourth quarter, increased from Rs. 21.8 crore to Rs. 141.2 crore. This is lower by Rs. 15.2 crore vis-à-vis a net loss of Rs. 156.4 crore incurred in the previous quarter.

In the contract exports business, weak order flow / order cancellation led to lower capacity utilisation and forex loss. Corrective actions have been taken to regain profitability.

The company reported consolidated net loss of Rs. 430.5 crore against net profit of Rs. 150.8 crore attained in the previous year largely due to new business strain in the life insurance business and increased losses in the BPO and the garments businesses.

In the BPO and the garments businesses, the leadership team has been strengthened to ensure that the businesses achieve profitability faster.

Aditya Birla Nuvo is optimistic about meeting the challenges of strategic growth initiatives and enhancing its revenues and earnings. We have taken initiatives to ensure that all ongoing activities should start delivering the profitable growth from the ensuing year itself.

Dividend
The board of directors has recommended a dividend of 40 per cent for the current year entailing total outgo of Rs. 42.4 crore including dividend distribution tax.

Change in the management
Mr. Adesh Gupta, CFO and Whole Time Director, has been appointed as CFO of Grasim Industries Ltd. from May 1, 2009.

Mr. Sushil Agarwal, President of Birla Global Finance Co. Ltd., will be taking over the role of CFO of Aditya Birla Nuvo. He has been a part of many restructuring initiatives of the Aditya Birla Group and is known for his financial acumen and analytical skills.

Mr. Pranab Barua, the Business Director for Garments has been inducted as Whole Time Director on the board of the company.

Dr. Rakesh Jain, present Joint Managing Director, will take over as Managing Director of the Company, on completion of the tenure of Dr. Bharat K. Singh.

Aditya Birla Nuvo

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