It was a gloomy diamond jubilee for Siemens in India. In its 75th year in India, the company posted a loss of Rs 84.5 crore due to a fall in orders, higher interest and operating costs and one-off charges due to restructuring of its telecom division.
The companys losses would have been higher at Rs 104.9 crore if it had not changed its depreciation method last year, from written down value (WDV) to straight line method (SLM). As a result, the company was able to write back excess depreciation of Rs 20.5 crore.
German giant Siemens AGs 51 per cent subsidiary yesterday announced its unaudited results for 12 months ended March 31, 1997. The results include the performance of the telecom division for six months from April 1996 to September 1996. The division has since been spun off into a separate joint venture with Siemens AG, in which Siemens India holds 30 per cent.
Siemens turnover rose 10 per cent to Rs 1,166.5 crore. Total new orders received amounted to Rs 1,184.8 crore against Rs 1,446.3 crore last year. However, the figures reflected substantial orders from the Paguthan power project in Gujarat, in which Siemens has a small stake. If orders from the Paguthan project are excluded, total orders declined by eight per cent.
The company was hit by a 49 per cent increase in interest costs from Rs 62.4 crore to Rs 93.3 crore. At the operating level, Siemens posted a reduced profit of Rs 73.3 crore, a fall of 54.7 per cent. Siemens one-off charges on the restructuring of its telecom division amounted to Rs 38.4 crore, with the costs of restructuring aggregating Rs 15.7 crore and charges relating to discontinuing of operations touching Rs 22.7 crore.
Siemens managing director J Schubert told reporters in Mumbai that the company is implementing a series of cost-cutting measures. He expressed optimism that the measures would see operations improving in the next 12 to 18 months.
Schubert blamed poor growth in industrial sector, lack of government orders in key divisions like rail transportation and telecom and the one-off restructuring charges for the poor showing.
