Apar Industries Ltd. reported that its transformer oil and specialty oil segment had income of Rs 32.3 crore (Rs 323 million or U.S. $4.5 million) before interest and taxes for the quarter ended Dec. 31, down 17.8 percent from the same period a year ago.
The Mumbai, India-based company, which also supplies electrical transformers, conductors and power and telecommunications cables, blamed the fall-off in its oils business on adverse credit conditions in the market and subdued demand.
Customers [are] facing delayed payments from power distribution companies, the company said in its Jan. 23 filing on the National Stock Exchange.
Third quarter sales revenue for the transformer and specialty oils segment was Rs 587 crore, down 19 percent from the same period of the 2019-2020 fiscal year. Volumes fell 12 percent year on year to 102,194 kiloliters, and per-unit margins dropped from 6.1 percent to 5.7 percent.
The contribution of exports during the quarter was 37 percent, down from 38 percent during the same period a year ago. Apar said its plant in Hamriyah, United Arab Emirates, operated at 65 percent of capacity.
The company said it expects profitability of the oils segment to improve marginally during the fourth quarter due to continued focus on margins and credit.
For the nine months ended Dec. 31, the oils segment earned Rs 98.3 crore before interest and taxes, up 15.8 percent year on year. Revenue for that period was Rs 1,480 crore, down from Rs 1,643 year on year.