Auto components major Motherson Sumi Systems Ltd (MSSL) on Tuesday reported a consolidated net profit of Rs 367.65 crore from continuing operations in the first quarter ended June 30.
The company had posted a consolidated net loss of Rs 1,121.60 crore from continuing operations in the same quarter last fiscal, MSSL said in a regulatory filing.
Consolidated total revenue from continuing operations stood at Rs 16,157.35 crore during the quarter under review. It was at Rs 8,348.35 crore in the year-ago period.
MSSL said its board of directors had on July 2, 2020, approved a group reorganisation plan which entailed demerger of the domestic wiring harness (DWH) business from it into a new company Motherson Sumi Wiring India Ltd (MSWIL).
Subsequently, Samvardhana Motherson International Ltd (SAMIL) would merge into MSSL to consolidate 100 per cent shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRPBV) as well as to bring all auto component and allied businesses in SAMIL under MSSL.
MSSL said the demerger of DWH into MSWIL meets the regulatory criteria to be considered as a discontinued operation, hence DWH business has been disclosed as discontinued operations in consolidated financial results.
During the quarter, the company said irregular production stoppages by OEMs (Original Equipment Manufacturer) globally due to supply chain constraints impacted its profitability.
Revenues were also impacted in India due to OEM production shutdown for the most part of May 2021 in the current quarter.
Commenting on the company’s performance, MSSL Chairman Vivek Chaand Sehgal said, “We have witnessed many localised and unpredictable challenges such as lower OEM production due to unavailability of semiconductor chips, higher commodity and logistics costs, etc in this quarter.”
“Despite challenging market conditions, the team has been able to deliver good results. We expect these headwinds to ease in the upcoming quarters as demand for personal mobility remains strong.”
MSSL said the supply chain disruptions due to semiconductor and other material shortages globally are likely to be headwinds for OEM production in the near term and are expected to improve from H2.