Telco net down 27 to Rs 71.20 cr

MUMBAI, MAY 29: Automobile major, Tata Engineering and Locomotive Co Ltd Telco has managed to stay in black due to other income' consis...

MUMBAI, MAY 29: Automobile major, Tata Engineering and Locomotive Co Ltd Telco has managed to stay in black due to other income8217; consisting of profits made from sale of investments and three critical sub-assemblies in the fiscal 1999-00. Its net profit, however, dipped by 26.9 per cent to Rs 71.20 crore from Rs 97.46 crore.

Net sales shot up from Rs 6,542.91 crore to Rs 8,791.79 crore during the period while other income, which includes a profit of Rs 127.19 crore from sale of investments, shot up to Rs 171.23 crore from Rs 51.04 crore last year.

The automobile major, which hived off its three sub-assemblies 8211; gear box, axle and machine tools 8211; into wholly-owned subsidiaries, has notched up a profit of Rs 134.34 crore from the sale of the divisions.

Profit before tax and extraordinary items stood at a negative - Rs 59.14 crore, against a profit of Rs 4.78 crore last year. Profit before taxation fell from Rs 107.16 crore to Rs 75.20 crore during the period.

The company blamed investments in its new Indica car project as the cause which hurt its profitability. quot;The company8217;s major investments in the new car facilities, as anticipated, adversely impacted profitability as is the case in any new fully integrated car activity during the ramp up period,quot; Telco said in a statement.

The company has recommended a dividend of Rs 2.50 for the year compared to Rs 3 last year. Its net profit last year was Rs 97.46 crore which was similarly boosted by the sale of its construction equipment business to a subsidiary company on March 31, 1999 for Rs 102.38 crore.

TELCO has reported a loss before tax and extraordinary items at Rs 59.14 crore in fiscal 1999-00 compared to a profit of Rs 4.78 crore last year.

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During 1999-00 the company achieved a 55 per cent rise in sales at 199,365 vehicles compared to the previous year. Market share in the medium and heavy commercial vehicles segment improved to 67 per cent driven by the implementation of marketing initiatives and the launch of Euro-I compliant Cummins powered vehicles, TELCO said.

With a total sale of 82,835 utility vehicles and cars, it has emerged as the second largest manufacturer of passenger vehicles in the country, the company said. Export turnover during the year grew by 20 per cent to Rs.609 crore compared to previous year.

quot;The improvement in the automobile industry led by the industrial recovery in the Financial year 1999/00, helped the company achieve a total sale of 199,365 vehicles, an increase of 55 percent over the previous year8217;s sale of 128,867 vehicles,quot; the firm said.

The results were announced after market hours and Telco shares ended Monday up Rs 4.90 at 122.90 on the Bombay Stock Exchange.

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During the year, the company repaid Rs 450 crore of its borrowings, which has brought down its average cost of funds to less than 11 per cent. However, the volumes surge raised the interest liability from Rs 309.57 crore to Rs 404.74 crore during the period.

Provision for deprecation was also higher at Rs 342.61 crore, up from Rs 281.31 crore last year.