Suzlons Losses Pile Up

Suzlon’s consolidated losses are close to US Dollar 90m in June 2009 quarter as against a profit of US Dollar 50m in the corresponding period of the previous year. This is the result of poor sales volumes, both in domestic and international markets.
Unfortunately, it has been adding capacity over the past couple of years and that has driven up fixed costs. As a result, Suzlon barely managed to stay profitable even at the operating level and the operating profit margin (OPM) came off from over 17 per cent in the June 2008 quarter to under 0.5 per cent in the June 2009 quarter. Suzlon’s Belgian subsidiary Hansen has indicated that revenues this year could be flat. That’s the biggest cause of concern.