The Hindu : Business : Siemens embarks on strategic investments

Online edition of India's National Newspaper
Friday, Nov 26, 2004

Business

Business

Siemens embarks on strategic investments

By Our Staff Correspondent

MUMBAI, NOV. 25. Siemens today announced aggressive plans to enhance its portfolio offerings and the board of the company has approved strategic investments. The company also announced a final dividend resulting in a total dividend of Rs. 9 (90 per cent) per share of Rs. 10 each including the interim dividend of 40 per cent. During the previous fiscal, the dividend was 75 per cent including a 35 per cent interim and a special dividend of 10 per cent.

Merger

Siemens' VDO Automotive Ltd. will be amalgamated with Siemens and the shareholders of this company will be issued shares of Siemens Ltd. in terms of the scheme of amalgamation. This Rs. 100 crore business is into design, manufacture and marketing of automotive electrical instruments and systems for various segments. It has three factories at Bangalore, Gurgaon and Pune and employs over 450 persons. This merger will allow the company to participate in the fast-growing automotive segment.Siemens will take 100 per cent equity stake in Demag Delaval Industrial Turbomachinery Pvt. Ltd. making it a wholly owned subsidiary. The company is into industrial turbines upto 150 MW which has been acquired by Siemens at a global level from Alsthom.

The Rs. 250 crore business has a factory at Vadodara and employs over 100 persons. The acquisition strengthens Siemens' PG division's portfolio in industrial power plants.

The company will take a 51 per cent stake in Pimac Engineering and Services, Bangalore, which maintains and services gas turbines and a wide range of industrial applications. Siemens intends to buy the remaining stake in the company in a phased manner and this business strengthens Siemens' service business.

Investment plans

While announcing the company's investment plans, J. Schubert, Managing Director, Siemens, said, "In the last fiscal, we kick-started an investment-led growth plan which will entail growing organically and also through acquisitions and mergers which will support our strategy for growth. This includes setting up new production lines, augmenting capacities, upgrading and modernising our factories and development centres to handle the increasing demand in the domestic and export markets. Our endeavour will be to grow faster than the market and increase our share. As India has been recognised by Siemens AG as a strategic pillar in the Asia Pacific region, along with China, Siemens India will play a much larger role in the region and also the global network."

9 p.c. rise in net profit

Siemens announced a net profit of Rs. 151.40 crores (Rs. 139.40 crores); an increase of 9 per cent. After adjusting one-time gains of Rs. 33.60 crores due to order cancellation and sale of property, the operational result grew by 51 per cent. The net profit for the last quarter of 2003-04 ending September 2004 was Rs. 57.20 corres; an increase of 7 per cent.

Sales turnover for the year was up 26 per cent at Rs. 1,790 crores (Rs. 1,424.50 crores) and the profit before interest, depreciation and tax, Rs. 239.56 crores (Rs. 208.54 crores).The major contributors and volume drivers to the turnover were the power transportation and medical businesses.The company provided Rs. 13.18 crores (Rs. 11.24 cores) for interest, Rs. 22.83 crores (Rs. 23 crores) for depreciation and Rs. 77.50 crores (Rs. 58.80 crores) for tax.

Siemens received new orders valued at Rs. 3,014.20 crores (Rs. 1,675.40 crores); a rise of 80 per cent. For the quarter ended September 30, 2004, new orders intake was Rs. 777.10 crores (Rs. 494.90 crores).

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