TVS' Indonesian subsidiary sells land for $16-million profit

The company sold its surplus land of 200,000 sq.metres during the year

TVS Motor's Indonesian subsidiary, PT TVS Motor Company Indonesia has sold one of its properties for a $23.4 million, generating a profit of $16.9 million (Rs 100.4 crore).

According to the company's Annual Report for 2012-13, PT TVS sold its surplus land of 200,000 sq.metres during the year.

The land was bought in 2008 and has been sold for a sale consideration of $23.4 million, generating a profit of $16.9 million. Consequently, profit before tax for the year was Rs 7.6 crore compared to a loss of Rs 87.72 crore in 2011-12.

"The sale of surplus land does not affect the manufacturing facilities of PT TVS," said the company.

The company is planning to launch a new kubek and a new motorcycle during 2013-14 for the Indonesian market. Both these products are expected to perform well and increase the sales during 2013-14. It is looking at expanding its dealership network from 100 dealers to 150 dealers by the end of March 2014.

The sales of the Indonesian subsidiary were lower at 19,000 units in 2012-13 as compared to 23,000 sold in 2011-12, consequent to the steep fall in the sales of the bebek category in Indonesia, where its current products are focused.

But, an improved margin resulted in a lower earnings before interest, taxes, depreciation and amortisation (Ebitda) loss at Rs 37.53 crore, compared to an Ebitda loss of Rs 49 crore in 2011-12, it added.

The motorcycle industry in Indonesia declined by 10 per cent, during the year, mainly due to the introduction of new regulations on the down payment for consumer financing.

The total two wheelers sold during 2012-13 were 7.2 million and the category share of bebek, which was dominant for five years, came down from 39 per cent to 27 per cent in 2012-13.

The scooter (skubek) category grew by five per cent and its category share went up from 53 per cent to 61 per cent.

The sports motorcycle category, witnessed a significant growth of 28 per cent, with the category share moving to 12 per cent, indicating the new preference of Indonesian customers.

In 2011-12, PT TVS launched a new style Apache 160 cc and 180 cc and PT TVS grew by 15 per cent in this category compared to the last year.

TVS Motor said it has been proposed by the board of directors of TVS Motor Company (Europe) B.V., to close down the investment outfit considering the general down turn in the business environment in Europe and across other parts of the world.

It has further been proposed, as part of their closing down the activities, distribution of assets and liabilities to the company's other overseas subsidiary, namely TVS Motor (Singapore) Pte. Limited, in the manner they now appear in their books of accounts.