Blue Star posted a loss of Rs 94 crore in the December quarter compared to a profit of Rs 13.36 crore in the year-ago period.
The company reasoned that this was due to a one-time expense of Rs 7.17 crore on its platinum jubilee celebrations and provision of Rs 14.46 crore towards exposure in its joint venture in Oman.
The company posted an 18.5 percent year-on-year (YoY) increase in total income to Rs 1109.34 crore in Q3. Among the business segments, electro-mechanical projects and packaged air-conditioning systems saw a 15.8 percent YoY increase in revenue to Rs 655.47 crore.
Unitary products’ segment revenues increased by 22 percent YoY to Rs 391.52 crore in the third quarter. This, the company said, was driven by enhanced demand for deep freezers and storage water coolers in the commercial refrigeration business, and by growth in the air coolers and water purifiers businesses.
“In view of cost overrun in the projects executed by Blue Star Oman Electro-Mechanical Company, the joint venture in Oman and unattractive business potential in Oman, the Board approved the proposal to exit the Joint Venture,” said the company.
It also added that this is subject to regulatory approvals. Further, it also said that the as a prudent measure, the entire residual exposure has been provided for.
“I am confident that the continuing value engineering initiatives, rejigging of the product portfolio and several cost correction measures will yield improvement in profitability in the months ahead,” said Suneel M Advani, Chairman of the board, Blue Star.―Money Control