Siemens has seen heightened interest from its customers in digitalization solutions to enable them to reduce their capex requirements, according to Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Ltd.
Mathur’s comments came after the company announced its financial results for the quarter ending March 31, 2020. Siemens reported a revenue at Rs.2,738 crore, a 20.9 per cent decline as compared to the corresponding quarter of the previous year, with profit after tax standing at Rs. 72 crore, a 38.6 per cent decline, for the current quarter as compared to the corresponding quarter of the previous year. The company’s order backlog stands at Rs. 12,547 crore, Siemens said.
Six of Siemens’ Indian factories have reopened with limited operations, after the COVID-19 related lockdown, and a further two are expected to be opened soon.
The decline in revenues across the businesses is primarily due to deferred offtake by customers and slow-down in short-cycle business related to COVID-19 as well as continued weaker demand in large infrastructure projects.
According to Sunil Mathur, “While we continue to optimize our operations to meet the rapid changes in the economic environment, our performance in the coming quarters will be influenced greatly by a lifting of the lockdown. We are delighted with the recent announcement of the Honorable Prime Minister of a Rs. 20 lakh crore stimulus package and now await further details, in particular with regard to Government spending in infrastructure and a revival of demand in the economy. In the meantime, we have seen a heightened interest from our Customers to find Digitalization solutions to enable them to reduce their Capex requirements, save cash and increase their productivity,” added Sunil Mathur.
Discussing the factors contributing to the decline in revenues in the quarter ending March 2020, Mathur observed, “With the slowdown in the economy being accelerated and accentuated by the sudden impact of the Covid-19 crisis, Capex spending reduced dramatically in the current quarter. A gradual slowdown in the operations of our customers and supply chain was already visible from February. With the announcement of the lockdown, all our factories, project sites and offices were shut since the last week of March, resulting in a steep drop in revenue for the quarter. Currently six of our factories have reopened with limited operations and a further two are expected to be opened this week.”
(Featured photograph courtesy of Siemens)
