Crompton Greaves posts Rs 189-cr loss

Crompton Greaves posted a Rs 189-crore loss for the third quarter of FY13, weighed down by employee liabilities due to restructuring of its operations in Europe. The company had made a profit of Rs 75.5 crore in corresponding period last year.

The company has right-sized its facility at Belgium. The process led to the recognition of a liability of Rs 120.7 crore with respect to employee costs, considered exceptional items.

Other restructuring costs, aggregating to Rs 108 crore, were also identified and been accounted under appropriate operating expense heads, the company said.

The restructuring is being done to trim costs, as high cost of operations have been impacting profitability.

The company has announced it is shifting some of the manufacturing facilities from Belgium to Hungary and expects that the full impact will be realised in coming fiscal.

Excluding the one off expense the company made a loss of Rs 45.50 crore on a consolidated basis. The results were much below street estimates. Broking firms were estimating a reduced profit on account of restructuring of costs.

Crompton Greaves reported a fall in its consolidated revenue. Revenue for 3Q FY 2013 stood at Rs 2971.83 crore as against Rs 3027.95 crore in same period previous year. The power segment which contributes to over 60 percent of the company's revenue performed badly reporting a decline in revenue and profit.

"Overall Crompton Greaves business continues to be impacted due to weakness in its European subsidiaries. Its operations in India are stable and last two quarters there was an improvement in margins. We had factored company results to be impacted due to exceptional items but result is below expectation,'' said an analyst.