The COVID-19-induced lockdown was implemented during the peak season of sales, stated Johnson Controls-Hitachi Air Conditioning India. So, this significantly impacted the sales and profitability of the company, it informed the stock exchange.
While the company has been able to partially compensate for the losses through cost-cutting and cash conservation measures, the loss of sales happened negatively impacting the company’s operating cash flows. “It (sales) is expected to become positive during the December quarter. Thus, the profitability is expected to be adversely affected due to COVID-19 situation.”
The company stated that it is too early to gauge the future impact on operations. “However, the company expects normalcy of sales during the September quarter, though with some spillover impacts remaining for some more time.”
Johnson Controls-Hitachi Air Conditioning India informed the exchange that the company usually takes loan in the month of March to build-up inventory for the season. However, the company asserted that it is in sound financial position to fulfil its obligations, despite having negative sales. “The company has already taken measures to bring the cost down and conserve cash and expect to reap benefits in future.”
As of now, almost all the aspect of business are up and running while dealing with challenges in logistics and service franchisees due to scarcity of manpower on account of reverse migration happened during lockdown.
Meanwhile, the company reported 34.94 per cent decline in sales to Rs 432.91 crore in the quarter ended March 2020. The net profit of the company also declined 83.07 per cent to Rs 7.16 crore in the quarter ended March 2020 as against Rs 42.30 crore during the previous quarter ended March 2019.
