SIEMENS LTD Q2 Results Not So Impressive

The market is disappointed with the financial performance of Siemens and this has been reflected in the tumbling share price. From Rs.268, the stock yesterday fell down by over Rs.40 and ended the day at Rs.224. The current low perception for capital goods stocks did not help.
For the year ended 30th September 2008, the company reported a 8% rise in net sales of Rs.8357.72 crore. Its operating expenses rose 7% and its EBITDA managed to stay up marginally by 3% at Rs.910.36 crore. Though interest outgo remained more or less stable, depreciation outgo rose 29%. PBT was up 2% at Rs.891.77 crore. But high tax outgo finally pulled down the PAT, which was down marginally by 0.54% at Rs.593.33 crore.
The fall in the PAT would have been much higher but for the gain of Rs.124.58 crore it reported under exceptional item. This gain was on account of the profit it made on sale of its automotive and building technology segment.
It declared a 1:1 bonus in January 08’ and it also declared a 150% final dividend for the year. So there might not have been any major appreciation in terms of the stock price but surely shareholders have got advantage of capital appreciation.
The company stated that higher expenditure in executing certain large projects has impacted the margins. It had bagged a large order from Qatar in the previous year. Because of the high base, the order book shrank by 14% in September 08’. Currently, the company has an order book of Rs.9834 crore, of which Rs.8,718 crore has been added in 2007-08. Liquidity crunch has impacted the decision-making process of the company, due to which planned investments have been deferred.

Siemens has divested 51% stake in its subsidiary based in Bangalore to Siemens Corporate Finance and the Board has also approved acquisition of the balance 50% stake in Kolkata-based Flender.
Yet, Siemens remains a very strong company.
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