Philips India Suffers Loss Of Rs 14.14 Crore In 1997

Philips India (PIL) has posted a loss of Rs 14.14 crore for 1997 though it improved its performance in the second half of the year. Against a loss of Rs 11.77 crore in the first six months of 1997, the company cut its losses to just Rs 2.37 crore in the second half.

Turnover jumped 4.7 per cent to Rs 1,556.47 crore against Rs 1,485.64 crore in the corresponding period last year. Despite losses, the company has declared a dividend of 10 per cent.

Operating profit of PIL has increased by 16.7 per cent to Rs 93.17 crore. This is mainly due to the increase in operating profit margin to 5.98 per cent compared to 5.4 per cent in 1996. PIL has also cut interest costs by 18.87 per cent to Rs 35.58 crore.

Gross profit increased by 35.2 per cent to Rs 76.48 crore. Depreciation was nearly on the same lines, at Rs 31.44 crore (Rs 31.51 crore) in the previous year. This resulted in the profit before extra-ordinary items and tax increase by 80 per cent to Rs 45.04 crore. However, the losses at the net level is mainly due to the company having an outflow of Rs 64.2 crore as extra-ordinary items.

The main item was the charges on account of employees voluntary retirement scheme to the tune of Rs 57.13 crore. The other items included a provision of Rs 8.8 crore in respect of a glass and lamp manufacturing facility which the company later deferred.

Last year the company, after re-examining the viability of this Rs 300-crore plant at Kota, decided to defer it due to poor demand of these products. However, PIL had also an inflow of Rs 1.72 crore from the sale of investments.

Due to the losses at the net level, the companys dividend pay-out is being paid from its reserves. As a result, reserves have declined to Rs 126.18 crore from Rs 145.33 crore at the end of December 1996.