Linde India sales down by 50% due to lower market demand
Sales dropped by 50.2% YoY and stood at Rs 248.13 crore in June 2020.
Linde India reported a steep decline in its sales during second quarter of the current fiscal due to lower market demand and lockdown.
The company reported net sales of Rs 248.13 crore in June 2020 down 50.2% from Rs. 498.21 crore in June 2019.
Quarterly net profit stood at Rs.19.50 crore in June 2020 down 3.31% from Rs. 20.16 crore in June 2019.
EBITDA stands at Rs. 74.00 crore in June 2020 down 23.72% from Rs. 97.01 crore in June 2019.
Further the company feels while there will be some impact on profitability in the short to medium term depending on the various possible scenarios, it is difficult to assess the exact quantum at this stage.
However the company doesn’t foresee any incremental risk with regards to its ability to service financial arrangements and recoverability of its assets including inventory and receivables.
The impact of various actions of the Government as a precursor to the lockdown was being felt from mid-March 2020 mainly in the form of disruptions in supply chain and further contraction of demand.
While there were large scale disruptions in manufacturing and supply chain across industry segments on account of the nation-wide lockdown, some of the industries such as iron and steel, pharma, FMCG, and the healthcare sector were specifically exempted by the Government of India from such lockdown.
Under such circumstances, the company took measures to sustain operations at its onsite Air Separation Units and PGP plants with minimum manning, maintaining social distancing, use of PPEs and extensive use of technology with a view to support demand mainly from iron and steel and healthcare customers.
Special efforts were made to sustain the movement of tankers, carrying industrial and medical products by implementing measures such as rotation and coaching of drivers and helpers on minimizing contact during deliveries, providing sufficient PPEs to them, implementing sanitization of vehicles and contaminated cylinders, etc. and ensuring necessary safety precautions for sustaining the operation of Transport Operating Centre and National Scheduling Centre at the Head Office with reduced manning.
While the operations and the productivity had hit its bottom in the month of April 2020 at about 50% of the pre-covid levels, gradual improvements have happened since May 2020, when the operations improved to about ~60%.
The company has now been able to ramp-up production to about 75 to 80% of the pre-covid levels in June 2020. Many of our suppliers and customers in India who were not operating at all in the initial period of the lockdown, are now operational.