The Board of Directors of Sona Koyo Steering Systems Ltd. (SONA), India’s largest manufacturer and supplier of Steering Systems, in Technical and Financial Collaboration with global No. 1 Steering System manufacturer viz. ‘JTEKT Corporation’, Japan (formerly Koyo Seiko Co., Ltd.), in its meeting held on 18th July, 2008 has taken on record the Un-audited Financial Results for the First Quarter ended 30th June, 2008.

In the Q1 ’09 ended 30th June, 2008, SONA, has seen a modest 9% growth in sales to Rs. 201.1 crores compared to Rs. 185.3 crores, over the corresponding period last year. The Profit Before Tax stands at negative of Rs. 2 Crores down from Rs. 12.3 Crores during the corresponding period of the previous year. The downtrend on the bottom line is primarily due to the rising cost of steel, oil and other commodities. The company has created additional capacities in line with its previously announced investment plan of Rs. 400 Crores. However, due to the delay in product validation by customers, the benefit of localisation could not be achieved as per plan. The benefits of this capacity creation will accrue to the company during the later part of the year. The results for this quarter were also negatively impacted due to FOREX fluctuation for which the risk mitigation plans have been put in place.

Negotiations are on with customers to pass on the impact of high steel prices and other raw materials, which have risen considerably. The company has also taken further steps for profitability improvement through VA/ VE, localisation and deployment of further efficiencies in the supply chain. The benefits of these steps along with an aggressive marketing plan are expected to accrue in the coming quarters. The company has just received additional orders worth Rs. 16.2 Crores from Ford India and Reva – Electric Car.

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