Blackstone-controlled apparel company Gokaldas Exports Ltd has seen its Q3 (ended December 2011) net loss more than double over the year-ago period, in spite of improved operational efficiency. The company continued to see pressure on revenue besides mark-to-market losses due to forex fluctuations.
Consolidated net loss for the quarter rose to Rs 37.75 crore, compared to the loss of Rs 16.61 crore in the same quarter the previous year. On a sequential basis, its net loss rose 30 per cent, compared to Q2 FY12.
The company’s consolidated net sales shrunk 27.5 per cent to Rs 207.62 crore, compared to Rs 286.61 crore for the quarter ended December 2010. Sequentially, net sales were down 22.7 per cent.
The company said that overall volumes had been under pressure in the last quarter due to weak demand in Europe but it won new customers.
Gokaldas Exports clocked an EBIDTA of Rs 4.4 crore, with a margin of 2 per cent, compared to 1.7 per cent reported in Q2 FY12 and a loss during Q3 FY11.
“The company has shown improved profitability in this quarter with sustained efforts on cost and margin management. There has been reduction in operating costs despite the inflationary trends. In addition, finance costs have also been reduced in the quarter under review through better working capital management, notwithstanding the rising interest rates,” the company said.
One major hit came from the forex movement. The last quarter saw the Indian currency depreciate 9 per cent against the US dollar and a sharper fall of 19 per cent since April 2011. “This has resulted in mark-to-market losses in our books on account of restatement of forex-denominated working capital loans,” the company said.
These accounted for losses of Rs 27.36 crore in the last quarter, as against Rs 18.12 crore for the previous quarter ended September 2011. The firm had reported forex gains of Rs 3.68 crore in Q3 FY11.
“With a stable pricing regime for cotton and the US market providing some optimism for the sector, we continue our efforts towards working closely with our customers, existing as well as new, to increase our share of business from them and also to expand the categories being serviced for them,” the company said on the future outlook.
Gokaldas Exports scrip closed at Rs 80.25 a share in a strong Mumbai market, unchanged from the previous trading session.
Blackstone holds 68.27 per cent in the company while previous owner Hinduja family has around 20 per cent stake. Blackstone had invested in the company way back in 2007 and put in over $150 million in the public-listed textiles company in one of the rare control deals in India. At the current market price, the PE giant is sitting on unrealised losses of over 70 per cent, according to VCCircle estimates.