AGC Networks Q3 loss at Rs 3.55 cr

Reduces losses from Rs 89.63 cr on y-o-y basis; returns to profitability at EBITDA level

Essar Group firm AGC Networks reported a net loss of Rs 3.55 crore for thethird quarter ended December 31, 2014 compared to loss of Rs 89.63crore in the same quarter last year.

Ona sequential basis too the company managed to bring down its loss forthe quarter from Rs 9.24 crore in quarter ended September 30, 2015.

Revenueat Rs 232.45 crore for the quarter was up 23% from Rs 188.9crore reported in the same quarter last financial year. On quarter-on-quarter basis revenue grew 3.6%.

Thecompany which is in the midst of a reorganisation to improveprofitability, AGC Networks reported loss of Rs 282 crore forFY2013-14, said that the business has seen traction due to thechanges the new management was bringing in.

Thecompany for the first time in the last several quarters returned toprofitability at the EBITDA level during this quarter. EBITDA for thequarter was at Rs 8.16 crore, from a loss of 24.69 crore in the samequarter last year.

"Wehave been working on a plan to bring back the company toprofitability and the numbers clearly hint towards that. In our veryfirst quarter (JASQ2), we increased the sequential turnover 18%, optimisedmanpower by 25%, improved margins by 70% and returnedto operating profits," said Anil Nair, MD and CEO, AGC Networks.

ThoughNair did not point out to the specific reasons for the losses thatthe company incurred, he said: "In our business margins are low.The only way we can improve is by being efficient, in supply chain,in managing customer's among other things."

Nairwho joined in June of 2014 has also made operational changes such asreducing the channel partner from 126 to 10. "Its a choice betweenfocusing on channel partners or customers, and as the new strategy wechoose to focus on customers," added Nair.

Theother step that the company did was optimising the portfolio. Thisalso meant looking into contracts that would clearly allow thecompany to see the deliverable. The company also optimised supplychain by closing four warehouses and creating hubs to take care ofcustomer services.

Thecompany also laid out plans to be a global company. At present therevenue contribution from international markets is 40% andrest comes from domestic market. Nair is looking at a 50:50 ratio inthe next two to three years.

AmalThakore, Chief Financial Officer, AGC Networks said "Sustaining theturnaround hinges on focusing on cash-flow, financial controls andcorporate governance. This will continue to be the foundation formeeting our near and longer term growth objectives across allgeographies we operate in."