Skoda slips into red with Rs 6.38 crore loss in FY 19

Updated: September 19, 2019 5:18:15 AM

The company incurred losses despite a 11% decline in expenses and twofold increase in other income. Revenue from operations fell 14% to Rs 3,759.75 crore in FY19, against Rs 4,372.33 crore in the previous fiscal, documents sourced from ministry of corporate affairs showed.

Skoda, auto sector, auto sector slowdown, Skoda Auto AS, auto sector, industry newsThe losses could have been more but financial assistance from the parent company — Skoda Auto AS — helped the Indian arm.

By Pritish Raj

Skoda Auto India, the maker of sedan Rapid and Octavia, has slipped into red with the company reporting a loss of Rs 6.38 crore during the financial year ending March 2019, hit by falling demand for its cars and lower revenues. The local arm of the Czech carmaker had posted a profit of Rs 22.18 crore in FY18.

The company incurred losses despite a 11% decline in expenses and twofold increase in other income. Revenue from operations fell 14% to Rs 3,759.75 crore in FY19, against Rs 4,372.33 crore in the previous fiscal, documents sourced from ministry of corporate affairs showed.

The losses could have been more but financial assistance from the parent company — Skoda Auto AS — helped the Indian arm. The company in its filing said while the revenues in FY19 were impacted primarily due to decline in sales of Audi brand of cars, the gross margin decreased due to increase in custom duty rates, employee benefit expenses and impairment loss.

“Same has been marginally offset by increase in other income due to receipt of financial assistance from Skoda Auto AS. This has resulted in loss after tax to the company,” Skoda Auto India said. Even as employee benefit expenses rose by Rs 24 crore to Rs 120 crore, the company’s total expenses was less by 11% to Rs 3,975.6 crore.

During the year, when the total passenger vehicle sales stood at 33,77,436 units, Skoda Auto India could only sell 16,521 units, a 5% decline from the year-ago fiscal. Over the years, the company with a market share of less than 0.5%, has been struggling to gain a strong foothold in the Indian market, hit by intense competition and higher prices of vehicles.

In FY18, Skoda’s profits fell by a massive a 66.21% to Rs 22 crore, hit by higher expenses and lower financial support from the parent entity. The company’s profit after tax during FY17 stood at Rs 65.65 crore.

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