Financial Performance For Q1FY12

Central airconditioning and commercial refrigeration major Blue Star Limited reported Total Operating Income of Rs 704.68 crore for the quarter ended June 30, 2011, as compared to Rs 664.83 crore in Q1FY11, representing an increase of 6%.

Operating profit (PBIDT excluding Other Income) for the quarter declined by 55% to Rs 27.59 crore. The contracting environment in the country is becoming increasingly challenging as labour, raw material input costs and general operating expenses increases continue unabated. The Company has responded by sharpening oversight on project costs and examining the project profitability more critically, largely in the Electro Mechanical Projects & Packaged Airconditioning Segment. As a result, the top and bottom lines from contracting activities have been and will continue to be under pressure for the immediate future.

Net Profit was lower by 74% at Rs 9.79 crore compared to Rs 37.15 crore in Q1FY11.

Earnings per share for the quarter (Face value of Rs 2.00) stood at Rs 1.09 vis-à-vis Rs 4.13 in the corresponding quarter of the previous year.

The Electro Mechanical Projects and Packaged Airconditioning business accounting for 49% of the total revenues in the quarter, declined 9% while segment results fell sharply to a loss of Rs 8.87 crore as compared to a profit of Rs 33.57 crore during Q1FY11. Cooling Products revenue registered a healthy increase of 30% in the quarter, driven mainly by higher room airconditioner sales. Segment results, increased by 24%. The Professional Electronics and Industrial Systems business revenues increased marginally by 3%, but segment results registered a substantial increase of 46%.

Carry Forward Order Book as on June 30, 2011 increased to Rs 2099 crore compared to Rs 1976 crore as at June 30, 2010, representing a growth of 6%.

Outlook

After showing some signs of revival, the overall investment climate has significantly deteriorated in the past year. The Company expects the next few quarters to be a challenging period for the Electro Mechanical Projects business. While, the market continues to be sluggish in terms of new orders and project execution times, the Company's focus will continue to be on managing the capital employed in this business. The other two segments namely the Cooling Products business and the Professional Electronics and Industrial Systems business performed well during the quarter and this trend is likely to continue in the coming quarters as well.

For additional information, please contact: B Thiagarajan, President, Airconditioning & Refrigeration Products Group, Blue Star Limited, Bandbox House, 254D, Dr Annie Besant Road, Worli, Mumbai – 400 030 email: btn@bluestarindia.com Telephone: 09821078098.