Electrical engineering major, Siemens Limited turned around to report a net profit of Rs 351 m in its financial year ended September 30, 1999. The company had posted a net loss of Rs 560 m in the previous financial year.
Net profit margin
Siemens manufactures automation systems, components, medical equipment, motors and drivers, power generating equipment and switchgears. It derives 40-45% of revenues from standard products (automation, ancilliary equipment). The balance is split between power projects, industrial projects and switchgears. Thus about 70% of revenues are vulnerable to economic fluctuations.
The positive bottomline was a result of the restructuring efforts undertaken by the company to cut costs. Significant decline in depreciation and interest outgo helped in this turn around. A 22% jump in lease and other income also benefitted the company.
The company's future operational outlook seems positive. Its new order book position is up 52% to Rs 1.3 bn. The company is also reviewing its investment options in consultations with its German parent Siemens AG. The underlying motive for review is to minimise risks and identify higher growth areas.
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