Chennai, October 30th, 2009: The Board of Directors of Tube Investments of India Limited (TII) met today and approved the un-audited financial results for the first half year ended 30th September, 2009.
During the quarter sales were at Rs. 585.57 Cr. as against Rs.630.46 Cr. in the same period last year. The profit before depreciation, interest and tax for the second quarter was at Rs. 64.28 Cr. against Rs. 63.41 Cr. last year. The profit before tax and exceptional items for the first half was higher at Rs. 84.27 Cr. against Rs. 66.32 Cr. in the previous year representing an improvement of 27%. The profit after tax for the first half of the previous year included an extraordinary income of Rs. 46.66 Cr. on sale of certain long term investments. The net profit for the current year was affected by the charge of Rs. 30.21 Cr. towards diminution in the value of its investment in its wholly owned subsidiary, Tubular Precision Products (Suzhou) Company Ltd., in China. Mr. L. Ramkumar, Managing Director said, “A strong performance by all businesses in the domestic market, focus on efficiencies and value added products helped the Company improve its margin and achieve a higher operating profit despite decline in exports to the European and American markets.”
Review of Businesses – Second Quarter
The Cycles division registered a 20% increase year on year in the value added “Special segment” with an overall growth is sales volume of 18 %. Focus on value added models and higher sales helped the division post its highest ever operating profit.
The Electric scooters launched by the division last year have been registering increasing sales quarter on quarter and have helped it achieve the No 1 position in South India. The product has also been well received in other parts of the country, where it was introduced during the quarter, and is now available in 103 outlets across the country. With the addition of more outlets, sale of electric scooters is expected to increase further.
Sale of cold rolled steel strips declined by 31%. However there was an increase in the sales volume of precision tubes in the domestic market. The North American markets continue to be sluggish and hence export of tubes was lower by 43%. Tubular components continued to grow and increased during the quarter by 36%. Better performance in the domestic market and focus on operational efficiencies and cost reduction helped the division report a better profit.
All product lines in the Metal Formed Products segment grew in the domestic market. Export of industrial chains declined by 69%. The car doorframe business grew 12% and supply of sections for railway wagons increased by 72%. Automotive chains sales increased by 48% while industrial chains grew 7%.The market share in the automotive chains segment increased 10% over the same period last year. The business has also obtained Letters of Intent for manufacture of Fine Blanked components for the four wheeler industry.
With its focus on growth segments and new value added products and ensuring efficiency in its operations, the Company is confident of a better performance in the coming quarter.
Due to the depressed economic environment and the intense competition in the Chinese market the overseas subsidiary of the Company, Tubular Precision Products (Suzhou) Co Ltd., (TPP) has not been able to operate profitably. The cumulative loss upto 30th September, 2009 is Rs. 30.21 Cr. On a review of the viability of the business, taking into account the current business environment the diminution in value of its investment to the extent of Rs. 30.21 Cr. has been recognised.
The consolidated profit before exceptional items for the half year was at Rs. 70.84 Cr. against Rs. 47.69 Cr. in the previous year, a growth of 48%. Cholamandalam DBS Finance Ltd, a joint venture company in financial service business achieved a profit before exceptional items of Rs. 10.43 Cr. against a loss of Rs. 12.51 Cr. in the previous year. Cholamandalam MS General Insurance Company Ltd., the general insurance subsidiary of the Company registered a growth of 16% in Gross Written Premium during the first half year.
About Tube Investments of India
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands – Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motor cycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto- component industry.
About the Murugappa Group:
Headquartered in Chennai, the Rs. 15,907 crores (USD 3.14 billion) Murugappa Group is one of India’s leading business conglomerates. Market leaders in diverse areas of business including Engineering, Abrasives, Finance, General Insurance, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Bio-products and Nutraceuticals, its 29 companies have manufacturing facilities spread across 13 states in India. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees. The Group has forged strong joint venture alliances with leading international companies like DBS Bank, Mitsui Sumitomo, Foskor, Cargill and Groupe Chimique Tunisien and has consolidated its status as one of the fastest growing diversified business houses in India.
For further information, please contact:
Tube Investments of India Ltd
Tel: 044 -2530 6702 / 4211 4747