OREANDA-NEWS. February 16, 2012. The board of directors of Voltas, a global air conditioning and engineering services provider of the Tata group, have today announced the unaudited consolidated financial results including the consolidated segment report, for the quarter and nine months period ended December 31, 2011.

Quarter end December 31, 2011:

The consolidated sales / income from operations was higher by 11 per cent at Rs1,160 crore, as against Rs1,048 crore in the corresponding quarter last year. Operating profit before exceptional items was higher by 6 per cent at Rs89 crore, as compared to Rs84 crore in the corresponding quarter last year. After accounting for exceptional items including a charge for an onerous contract of Rs277 crore, the loss for the period was Rs115 crore compared to a profit of Rs71 crore in the previous year.

Electro-mechanical projects and services:

Segment's revenues were higher at Rs824 crore as against Rs693 crore in the corresponding quarter last year. The profitability of this segment, before onerous contract and exceptional items was higher at Rs60 crore as compared to Rs44 crore in the corresponding quarter last year. In case of one onerous contract, there has been a significant upward revision in the estimated costs due to design changes and delay in execution.

The onerous contract pertains to the Sidra Medical and Research Centre hospital project in Qatar. This project is an approximately \\$2.5-billion, state-of-the-art hospital with world-class facilities. Voltas's share of work is valued at over Rs1,000 crore. This prestigious, one-of-a-kind project involves extensive coordination with multiple agencies / intermediaries, and has been under execution since 2008. It is now expected to be completed in phased stages by end 2012.

The company has, in line with AS-7 guidelines, accounted for the total estimated cost on the project. The estimates for Sidra have been finalised after an extensive techno commercial review by the management taking cognizance of cost incurred, and to be incurred, to complete the project on time. Additional revenue claims will be recognised at a later stage as per the accounting standard requirement, once they are crystallised and there is a greater clarity about the final outcome.

The order book of the segment stood at Rs5,094 crore, as compared to Rs4,697 crore in the corresponding quarter last year.

Domestic project business:

Within India, the projects business has performed well, despite current economic conditions, showing an increase in both, revenue and profit. Importantly, this is at a time when major competitors in this business have either reported loss or less than satisfactory results.

Engineering products and services:

In view of transfer of materials handling business, the segment revenues, results and capital employed of this segment for the current period (quarters) are not comparable with the corresponding periods last year. Segment's revenue and results were at Rs88 crore and Rs17 crore, respectively.

Unitary cooling products for comfort and commercial use:

Segment's revenues grew by 19 per cent to Rs234 crore and the profit was Rs14 crore.

Nine months period ended December 31, 2011:

The consolidated sales / income from operations grew by 3 per cent to Rs3,622 crore as compared to Rs3,530 crore in the corresponding period last year. Profit after tax and minority interest / share in profit / loss of associate was Rs58 crore as against Rs256 crore in the corresponding period last year primarily due to recognition of expected cost over-runs on the onerous contract. Earnings per share stood at Rs1.76 on face value of Re1 per share (not annualised).

The company (international project business) has been awarded the prestigious MEP contractor of the year award in the UAE and Qatar. The long-term business prospects in the GCC region remain good and the company has formed joint ventures in the Kingdom of Saudi Arabia and the Sultanate of Oman to expand its reach.