Siemens posts Rs 2 cr loss in June quarter due to Covid-19 disruptions

Siemens on Friday reported a consolidated net loss of Rs 1.9 crore for June quarter 2020 mainly due to lower revenues in view of the Covid-19 pandemic.

In the year-ago period, the company logged a profit of Rs 250.1 crore, a BSE filing said.

Total income in the quarter declined to Rs 1,417.9 crore from Rs 3,300 crore in the same period last year.

The company follows October-September as financial year.

Revenue during the quarter fell 59.5 per cent to Rs 1,260 crore from Rs 3,110 crore in the year-ago period, driven by the closure of all factories and project sites on account of Covid-19.

This also resulted in a standalone net loss of Rs 5 crore in June quarter compared to profit after tax of Rs 248 crore in the year-ago period.

The company, however, has a strong order backlog of Rs 13,142 crore, which provides a visibility of more than one year of revenue and has improved its cash performance during the quarter, it added.

The decline in revenue across the businesses extended from the previous quarter due to the nationwide lockdown related to Covid-19 and continued weak demand, MD&CEO Sunil Mathur said.

"All our factories, logistics centers, supply chain and project sites were only able to start ramping up from mid-May onwards. In addition, we incurred substantial ramp up costs including costs required to maintain the highest standards of Health and Safety in each of our factories and project sites. As on date, all our factories and approx. 75 per cent of our project sites have reopened and are at utilization levels of 20-70 per cent, Mathur said.

He noted that large project announcements by the central and state governments in the transmission, distribution and mobility sectors, have reduced significantly.

With continued muted demand in the economy, coupled with the uncertainty surrounding the extent and duration of the virus with its resultant restrictions, many private customers have deferred their capex plans and have launched programs to optimize costs and conserve cash, he added.

"We are however beginning to see a revival of demand in some sectors but will need to assess how sustainable this is. We do believe however that it is now critical to increase demand in the economy and this will require increased Government spending in infrastructure, Mathur said.

Consequent to the above economic scenario, the company shall continue to drive solutions in the energy transmission, distribution and mobility segments as also its digital offerings across all its businesses.

"Each one of our businesses has also started optimizing costs to preserve and grow our profitability. Our focus on profitable growth continues, Mathur said.