Hit by the sharp slowdown of the automobile industry, global component supplier Bosch Ltd. reported on Thursday a 7.7 per cent decline in net profit during 2013. The company reported net sales of Rs. 8,641 crores in 2013, 1.4 per cent higher than in the previous year. The company made a net profit of Rs. 884.68 crores in 2013, compared to Rs. 958.27 crores in 2012.
Steffen Berns, Managing Director of Bosch Ltd. and President of the Bosch Group in India, attributed the tardy performance in 2013 primarily to the decline in the overall automobile sector, particularly in the medium and heavy vehicle segments. “We planned and invested for very high growth but the marked performed poorly,” he said.
The capital outlay of Rs. 500 crores, made by the company in anticipation of growth of the automobile sector, only resulted in higher depreciation charges, Mr. Berns said. “The accumulation of assets, which we made expecting an expansion of the market, resulted in depreciation costs increasing by 4.7 per cent,” he remarked.
The sharp depreciation of the currency also added to costs because Bosch is “a net importer,” Mr. Berns said. “Imports, accounts for about one-fourth of the company’s overall revenues,” he pointed out.
The company has planned a capital outlay of Rs. 600 crores during the current year.
Bosch also announced the formation of a new business unit, the Energy and Building Solutions unit. The division, based in Bangalore, would provide services and solutions to the Asia-Pacific and West Asian markets, apart from India.