Eicher Motors today announced its audited consolidated financial results for the quarter and year ended March 31, 2019.
For Q4 (January-March 2019), Royal Enfield’s total revenue was at Rs 2,500 crore, down 1 percent YoY, EBITDA was Rs 685 crore, down 14 percent YoY. Eicher Motors reported Profit After Tax (PAT) of Rs 545 crore (18%), as compared to Rs 462 crore a year ago.
During Q4, Royal Enfield sold 197,567 motorcycles, down 13 percent. For FY2019, the two-wheeler business reported revenue of Rs 9,797 crore, up 9 percent YoY. During the same period EBITDA was Rs 2,903 crore (3% YoY), PAT was Rs 2,203 crore (12%). The company sold 822,724 motorcycles in last fiscal, which is marginal growth (0.3%) from 820,121 motorcycles sold in FY2018.
Commenting on Royal Enfield’s performance, Siddhartha Lal, MD, Eicher Motors, said, “The latter half of 2018 was a challenging period for the two-wheeler industry in India with factors such as revision in insurance cost, increase in prices on account of new safety norms, affected consumer sentiment. At Royal Enfield, we recorded flat sales volumes after several years of augmented sales growth. Despite a challenging fourth quarter, the trend of premiumisation continues to show significant potential. This was a landmark year for Royal Enfield as our new 650 Twins – the Interceptor 650 and the Continental GT 650 – began to retail after the global launch in California. We believe challenges are an opportunity to introspect and better ourselves. We believe our fundamentals are robust, and we have the capabilities in place. I’m very happy to have Vinod Dasari join us as CEO, as we gear up with renewed focus on getting closer to our ambition of being a global consumer brand from India.”
In Q4, Royal Enfield tied up with a local assembler to establish assembly operations in Thailand, its first outside of India. Operations are slated to commence by June 2019.
Royal Enfield also made an entry into South Korea and opened its flagship store in Seoul. New stores were also opened in Hanoi, Vietnam and Bogor, Indonesia.
VECV impacted by slowdown
Eicher Motors’ commercial vehicle business, VE Commercial Vehicles was affected by the industry slowdown especially in the second half of FY2019. In Q4 FY2019, VECV’s revenue from operations was Rs 3,209 crore, down 3 percent YoY. EBITDA declined by 13 percent to Rs 274 crore from Rs 315 crore a year ago, and PAT at Rs 139 crore was down 22 percent. The company sold around 21,010 trucks and buses in the quarter, registering a YoY decline of 9 percent. Given intense competition, heavy discounting and higher base from last year, VECV says its sales in the Light & Medium Duty (LMD) segment declined by 9 percent and 25 percent in the Heavy Duty (HD) segment during the quarter.
Speaking on VECV’s performance, Lal said, “While registering a decline in the fourth quarter, VECV finished the year at par with the industry growth of 12 percent. The market conditions were adverse due to all-time high price discounting. In 2018-19, VECV expanded its product portfolio with new launches in light duty segment with the Pro 2000 series, electric bus, an industry first 7-speed transmission and products based on new axle norms in the 48-tonne and 55-tonne segments. VECV also entered Indonesia and South Africa with Kuzer under the UD brand. We continue to believe that we can be the catalyst to drive modernisation of commercial transportation in India and other developing markets.”