Financial Performance For The Quarter Ended September 30, 2011 (Q2FY12)

Blue Star Limited reported Total Operating Income of Rs 604.65 crores for the quarter ended September 30, 2011, as compared to Rs 694.76 crores in Q2FY11, representing a decline of 13%.

Operating profit (PBIDT excluding Other Income) for the quarter declined by 80% to Rs 13.62 crores. The overall economic climate continued to deteriorate during the quarter due to slower GDP growth, high inflation, interest rate increases and weakening of the rupee. All the three business segments were adversely impacted. The contracting business was affected the most as input costs and general operating expenses increased resulting in lower margins in various long-gestation projects.

Financial expenses during the quarter increased from Rs 3.28 crores to Rs 30.56 crores. This was due to higher interest costs and unrealized foreign exchange losses on account of strengthening of the dollar.

Consequently, there was a Net Loss of Rs 20.80 crores compared to Net Profit of Rs 38.65 crores in Q2FY11.

The Electro Mechanical Projects and Packaged Airconditioning business accounting for 64% of the total revenues in the quarter, declined by 19% while segment results fell sharply to a loss of Rs 3.41 crores as compared to a profit of Rs 43.37 crores during Q2FY11. Cooling Products revenue registered an increase of 11% in the quarter. However, Segment results, declined by 45% due to cost pressure. The Professional Electronics and Industrial Systems business revenues declined by 12%, while segment results increased by 2%.

Carry Forward Order Book as on September 30, 2011 increased to Rs 2162 crore compared to Rs 1999 crore as at September 30, 2010, representing a growth of 8%.

Financial Performance For The Half-Year Ended September 30, 2011 (H1FY12)

For the half-year ended September 30, 2011, the Company reported Total Operating Income of Rs 1309.32 crores, as compared to Rs 1359.59 crores over the same period in the previous year, a decline of 4%.

Operating Profit (PBIDT excluding Other Income) declined by 66% from 126.06 crores to Rs 41.82 crores.

There was a Net Loss of Rs 11.01 crores in the half-year period as compared to a Net Profit of Rs 75.79 crores in the corresponding period last year.

Outlook

Order inflow continues to be slow from the commercial construction industry. The business slowdown is expected to continue for some time. Revenues as well as profitability will be under pressure. Decrease in commodity prices such as copper is expected to help to cushion the erosion of margins. The Company plans to focus on cash flow, management of working capital and tight cost control to tide over the current difficult phase.

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.