Published - 15 May 2023 by Tractor Junction
Commodity Price Rise Has a Detrimental Effect on Escorts Kubota's Earnings in FY2023
During the course of the year, the Escorts Kubota brand sold 24,765 tractors, an increase of 13%, and 1,528 units of construction equipment, a sharp increase of 18%.
Recently, Escorts Kubota released the company's financial results for FY2023, which were hit principally by commodity price increases combined with other exceptional items.
For the fourth quarter of fiscal year 2023, the company recorded revenue of Rs 2,214 crore, a 17 percent increase, and EBITDA of Rs 233 crore, compared to Rs 248 crore the previous year. The net income was Rs 216 crore, compared to Rs 190 crore in the preceding year's similar period.
The combined profit from operations during fiscal 2023 was Rs 8,428 crore, up 15.7 percent from Rs 7,282 crore in the previous fiscal year. However, the net profit after taxation was Rs 636 crore, down from Rs 735.6 crore the last year.
These profits were hit primarily by commodity price inflation and a unique item of Rs 97.2 crore resulting from the impairment of investment in the collaboration between Tadano Escorts India and its wholly-owned division Escorts Crop Solutions.
During the course of the fiscal year, the business managed to sell 24,765 tractors, an increase of 13%, and 1,528 pieces of construction equipment, an increase of 18%.
Nikhil Nanda, Chairman and Managing Director of Escorts Kubota, stated, “Our efforts are aligned with our mid-term business plan for achieving the targeted growth in coming years. In agribusiness, retail sales were impacted due to unseasonal rainfall and crop damage in certain regions. However, with better crop prices, improved finance availability and good water reservoir levels, we expect demand momentum to continue across geographies in the coming quarters.”
“We witnessed growth across the construction equipment portfolio towards the second half of this fiscal year across material handling, earth moving as well as road segment. The current market sentiments are positive, and demand is expected to remain buoyant due to the continuous focus of the government towards infrastructure projects.”
The Deputy MD of Escorts Kubota, Seiji Fukuoka, added, “Our efforts across domestic and export geographies are well mapped to leverage on opportunities across our core business verticals, and we are hopeful that with our strategic initiatives we will be able to achieve desired growth. Quality and performance will be our topmost priority and we will continue to focus on innovation and enhancing customer experience.”
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