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New Delhi Jan. 22 Carmaker Maruti Udyog Ltd has posted an 11 per cent increase in third quarter profit, as costs from consolidating a subsidiary affected the growth in earnings. The company's net profit during October-December 2006 stood at Rs 376.41 crore compared with Rs 339.01 crore in October-December 2005.

Loss on acquisition

The carmaker's earnings in the quarter were reduced by Rs 54.61 crore as a result of the consolidation of a joint venture with parent Suzuki Motor Corp, the company said. The acquisition of Maruti Suzuki Automobiles India Ltd (MSAIL) took place in the third quarter, Maruti said. The loss attributed to MSAIL is largely on account of high interest outgo (on a loan of $125 million which MSAIL had taken), depreciation and overhead costs such as salary payments, among others.

Meanwhile, the company's total income registered a growth of 18.3 per cent to Rs 3,807.9 crore during October-December 2006.

Maruti had announced in April last year that it would buy Suzuki's 30 per cent stake in MSAIL. The acquisition was approved in the past quarter, and the merger became effective November 13, Maruti said.

Interest costs for Maruti rose by almost nine times in the quarter to Rs 15.7 crore. The company's raw material costs, however, rose by only 3 per cent, even as volume sales increased by 18.7 per cent in the quarter. Maruti, which is set to unveil its Swift Diesel on Wednesday, is planning to introduce five new models in the next five years.

Meanwhile, for the nine-month period ended December 31, 2006, Maruti registered an increase of 16.8 per cent in its total income to Rs 10,617.56 crore.

Related Stories:
Higher sales, cost cutting measures drive Maruti's Q3 net up 41 pc
MUL to buy Suzuki's stake in Maruti Suzuki Auto

More Stories on : Financial Performance | Cars | Performance | Maruti Udyog Ltd

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