Chennai, July 29, 2009: The Board of Directors of Tube Investments of India Limited (TII) met today and approved the un-audited financial results for the first quarter ended 30th June, 2009.
During the quarter, sales were at Rs. 542.94 Crores, as against Rs.531.98 Crores during the same period last year. The net profit for the quarter was at Rs. 28.45 crores against Rs. 48.29 crores last year. The profit for the first quarter of the previous year included profit on sale of investments amounting to Rs. 31.84 crores. Mr. L. Ramkumar, Managing Director said, “All businesses of the Company registered a growth and the various initiatives taken over the last few months have yielded results, helping the Company post a higher Profit Before Interest and Tax (EBIT) of Rs.43.04 Crores as against Rs. 24.78 Crores in the same period last year”
The Cycles division registered a 22% increase year on year in the value added “Special segment”. The standard segment too grew at 12%. The higher volume and higher sale of specials bicycles helped the division improve both its profits and profitability.
The Electric scooters launched by the division last year have been well received. The number of outlets retailing these scooters has now increased to 49 and with the increase in outlets and presence in the bigger markets of North and Western India we hope to increase the sale of electric scooters.
The volume of cold rolled steel strips and precision cold drawn welded tubes declined by 26% and 7% respectively. Sales of Electric Resistance Welded tubes however registered an increase of 10%. Export of tubes continued to be affected since there has been no improvement in the American or European markets, as yet. The tubular components continued to grow and registered a growth of 26% in the current quarter. Better volume and focus on operational efficiencies and cost reduction helped the division report a much better profit as compared to the previous quarters.
The Metal Formed Products segment also reported a growth in all product lines barring exports. The sale of car doorframes increased by 15% and that of sections for wagons increased by 88%. Sale of automotive chains increased by 33% and industrial chains in the domestic market grew 11%. Export of chains was however low and declined by 69%.
Due to the depressed economic environment and the intense competition in the Chinese market the Tubular Precision Products (Suzhou) Co Ltd., (TPP), the overseas subsidiary of the Company, has not been able to operate profitably. The Company is evaluating various options to address the same.
With its strong focus on improving internal efficiencies, introduction of new products & improving product mix and reduction of costs the Company hopes to improve on its performance for the current quarter.
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. 15,646 crores (USD 3 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, Cargill, Foskor and Groupe Chimique Tunisien has consolidated its status as one of the fastest growing diversified business houses in India.