Aditya Birla Nuvo reports Q3 results

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Mumbai: Aditya Birla Nuvo continued to work on its defined strategy of building a strong foundation for all the businesses entailing

-- Achieving pan India presence in the Telecom business;

-- Expanding customer reach and augmenting portfolio in the Financial Services business;

-- Transformation from a wholesale garment company to a “High-end apparel retailing” company through continued expansion of retail space and

-- Improving operating efficiency through full utilisation of existing capacity and supporting business through cost effective sites and locations in the BPO business.

-- Expanding capacities in manufacturing businesses to tap sector growth.

As a result, while the company grew in net sales, profitability was strained due to: –

a) The gestating impact of the aggressive growth initiatives bunched together

b) The nature of Life Insurance business where new business premium, though profitable in the long run, causes strain in the first year due to the accounting procedure.

c) The global economic slowdown impacting India Inc., which has affected few of our businesses as well:

-- Carbon black industry was impacted by the sharp volatility in crude oil prices and slowdown in demand from the auto / tyre sector

-- Garment industry witnessed weak consumer demand and higher discounting

-- Growth rates in Life insurance and Mutual Fund industry softened due to volatile stock markets

The Company’s standalone net sales in the third quarter grew by 9% to Rs. 1,172.5 Crores from Rs. 1075.4 Crores, largely driven by the Fertilisers business.

The Company’s consolidated net sales rose by 17% to Rs. 3,429 Crores from Rs. 2,931.1 Crores. The Telecom and Life Insurance businesses contributed significantly.

-- The Telecom business registered a 60% rise in revenues at Rs. 2,728.6 Crores up from Rs. 1,708.1 Crores. Spice results since 16th Oct’08 are consolidated at 41.09% as a joint venture. Idea is now operational in 15 service areas with 38.01 million subscribers after “Spice” being rebranded as “Idea” in Punjab and Karnataka service areas. Idea ranks 5th with 11% all India market share as on 31st December 2008. Idea has received spectrum for the remaining five service areas and is targeting Pan India presence by the end of calendar year 2009.

During the quarter, a sum of Rs. 21 billion was received from Providence as capital infusion in Idea’s subsidiary Aditya Birla Telecom. The Debt-equity ratio (net of cash and cash equivalents of Rs. 8160.6 Cr.) stood at 0.19 as on 31st December 2008.