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Tube Investments reports higher net profit
for 2008-2009 Chennai, 1 May 2009: The company achieved a turnover of Rs.2061 crore in the year 2008-2009 against Rs.1744 crore in the previous year. The net profit for the year was Rs.72.18 crore against Rs.56.50 crore in the previous year. This represents a growth of 18% in turnover and 28% in profit after tax. The net profit includes an extraordinary income of Rs.47 crore as profit on sale of long term investments and divestment of a joint venture. The engineering business of the company was affected by the slowdown in the automotive sector during the second half of the year. As a result, the volume of precision steel tubes sold during the year declined by 14% and cold rolled steel strips declined by 20%. The revenue for the division was however higher by 9%. The extreme volatility in steel prices, lower demand and the lower pass through of cost increases affected the profits of this division. The profit before interest and tax was at Rs.17 crore against Rs.43 crore in the previous year. The company is focused on rationalisation of manufacturing, and improving internal efficiencies. The bicycles division achieved a volume growth of 8% and a revenue growth of 26% during the year. The profit before interest and tax was higher at Rs.29 crore against Rs.22 crore in the previous year. This was possible with the higher volume, better product mix and a higher share of revenue arising out of retail initiatives. The division recently started retailing the high-end bicycles of Cannondale and Bianchi under the 'Track & Trail’ brand of outlets. These outlets are destination stores and will appeal to the bicycling enthusiasts. The fitness products launched in the recent past have also performed well and registered a revenue growth of 225%. During the year the division also launched electric scooters and these products have been received well in the market. The revenue from this product is expected to increase this year with the product gaining greater acceptance and the distribution being improved through more outlets retailing these scooters. The metal formed products segment of the company also reported an improved performance in all its product lines. The volume of car doorframes sold increased 17% and sections for railway wagons grew by 164%. Sale of automotive and industrial chains in the domestic market grew 10% but export of industrial chains declined 15%. The decline in exports was due to the recession in the American and European markets. The revenue from the segment was higher at Rs.478 crore against Rs.368 crore in the previous year. The profit before interest and tax was lower at Rs.51 crore against Rs.56 crore in the previous year. The company incurred capital expenditure of Rs.114 crore and will continue with its focus on building capability and efficiency in its processes. The company is hopeful of a better performance in the current year on the back of the investments in new initiatives beginning to yield results, improvement in quality and service levels, cost reduction measures and new product introduction. About Tube Investments of India Headquartered in Chennai, 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 limited companies have manufacturing facilities spread across 13 states in India. The organisation fosters an environment of professionalism and has a workforce of over 30000 employees. The Group which has forged strong joint venture alliances with leading international companies like DBS Bank, Mitsui Sumitomo, Cargill, Foskor, China Engineering & Exploration Bureau and Groupe Chimique Tunisien, has consolidated its status as one of the fastest growing diversified business houses in India. For further information, please contact:
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