India's Voltas swings to quarterly loss on contract termination

BENGALURU (Reuters) - Voltas Ltd posted a loss for the second quarter on Tuesday, dented by higher expenses and a one-off expense related to a contract termination.

The cooling and engineering products maker's consolidated net loss for the three months ended September 30 was 74.1 million rupees ($896,660.21), compared with a profit of 1.04 billion rupees a year ago.

Voltas, known for its air conditioners, refrigerators and air purifiers, incurred a one-off expense of 1.06 billion rupees as an overseas customer terminated a contract.

The company, incorporated in 1954 as a joint venture between Switzerland's Volkart Brothers and India's Tata Sons, said it was evaluating legal remedies to challenge the termination and recover the proceeds of bank guarantee and due amounts from the customer.

The COVID-19 pandemic and the Russia-Ukraine war have led to a surge in raw material costs, with consumer goods makers globally taking a blow to their margins.

Overall expenses rose 6.9% in the second quarter.

Profit before exceptional items and tax stood at 1.20 billion rupees, compared with 1.43 billion rupees a year earlier.

Consolidated revenue from operations had a slender rise of 4.7% to 17.68 billion rupees.

Shares of Voltas, which competes with LG Electronics Inc and Samsung Electronics Co Ltd, dropped about 6.8% in the quarter.

($1 = 82.6400 Indian rupees)

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Krishna Chandra Eluri)