Maruti Suzuki to idle plant as Q4 net falls nearly 10% to Rs1.166 cr
28 Apr 2021
Maruti Suzuki Ltd, India’s largest carmaker, has reported a nearly 10 per cent year-on-year fall in its net profit, at Rs1,166 crore, for fiscal fourth quarter ended 31 March 2021, hit by a significant fall in sales volume, arising from the lockdown restrictions.
The declining sales and rising inventories have forced the Japanese carmaker to announce a temporary closure of its plants in Haryana between 1 and 9 May 2021 to make oxygen available for the healthcare and medical sector.
Maruti Suzuki uses a small amount of oxygen in its factories while relatively much larger quantities are used by the manufacturers of components.
According to Maruti Suzuki, currently, all the available oxygen should be used to save lives. Hence, the auto company also decided to advance its annual maintenance shutdown from June 2021 to early May. Production in all the factories will close for maintenance during this period.
Maruti Suzuki attributed the fall in profit to lower non-operating income owing to mark-to-market loss on invested surplus.
During the quarter, the company registered net sales of Rs2,295.86 crore, an increase of 33.6 per cent compared to the same period in the previous year.
The company sold a total of 492,235 vehicles during the fourth quarter of the 2020-21 fiscal, 27.8 per cent higher compared to the same period of the previous year. Sales in the domestic market stood at 456,707 units, which was up 26.7 per cent. Exports stood at 35,528 units, higher by 44.4 per cent.
The operating profit for the quarter stood at Rs1,250 crore, a growth of 72.8 per cent year-on-year, on account of higher sales volume and cost reduction efforts despite steep commodity price increase, the company said.
The company attributed the improvement in operating performance to improved capacity utilisation, lower sales promotion expenses and increase in selling prices and cost reduction efforts.
The company announced a dividend of Rs45 per share.
For the full year, Maruti Suzuki reported net Profit of Rs4,2,29 crore, which was 25.1 per cent lower compared to that in the previous year, due mainly to lower sales volume, increase in commodity prices, adverse foreign exchange movement, and lower non-operating income, which was partially offset by lower operating expenses, and cost reduction efforts.
Maruti Suzuki sold a total of 1,457,861 vehicles during the fiscal, which was 6.7 per cent lower compared to sales in the previous year and lower by 21.7 per cent compared to FY 2018-19. In fact, the Covid-related restrictions have affected Maruti Suzuki’s performance for the full fiscal year 2020-21, the company said.
In FY 2020-21, sales in the domestic market stood at 1,361,722 units, lower by 6.8 per cent and exports stood at 96,139 units, lower by 5.9 per cent compared to the previous year.
During the period, Maruti registered net sales of Rs6,656.21 crore, lower by 7.2 per cent compared to that in the previous year.