Kenichi Munakata,
Chairman,
Hitachi Home & Life Solutions (India) Ltd.
In order to pass on a living environment blessed with nature to the next generation. Hitachi Home & Life Solutions (India) Ltd. (HHLI) will maintain close contact with the "Lifestyle Zone" in striving to contribute to "quality of life."
I would like to take this opportunity to greet all the shareholders of Hitachi Home & Life Solution: (India) Ltd. (HHLI).As I informed you during my last year communication, I am serving your Company as Chairman since February 2008.
Your Company has made an Operating Profit (Profit before Depreciation. Interest and Tax) of Rs. 373.88 Mn. and contributed to the consolidated accounts of Hitachi Group. While Company has made profit this year there has been a severe dent in the profit percentage which has dropped considerably.
The year 2008-09 has seen the global economic slowdown. Last year, economic crisis attacked all countries, especially the major economies like US, UK, Japan are all reporting negative GDP growths and unfortunately India also got hit.
Indian Room Air conditioning Industry experienced the sales growth of around 7% over previous year. The market category of Ductable air conditioners however went in to a sharp decline this year. The growth in this category was good during the first half of the financial year gone by. However, the second half turned out to a real bad time for the category. The result is that for the entire financial year the Industry has negative growth by 20% approximately. The telecom industry however seems to have ducked the trend of de-growih. The industry maintained a status quo against last year and hence the need for Telecom Tower air-conditioning was not impacted too much.
This year saw further increase in share of the Split Air conditioners among the Room Air conditioners segment. Your Company being the pioneer of technological innovations is bound to benefit from this trend. During this year Company has launched "ACE FOLLOWME" (Tr. 1.5 & 2.0) and "ACE CUTOUT' (Tr. 0.9, 1.2, 1.5 & 2.0) range of Split Air conditioners. This range will further establish Company's technological leadership in the market.
Your Company has adopted voluntarily the energy efficiency rating scheme introduced by BEE (Bureau of Energy Efficiency). I proudly convey that 57% of Hitachi branded split air conditioners come with a 5 star rating and 80% of Hitachi branded split Air conditioners sold are 5 star rated (Based on the sales figures of the last quarter of FY 2008-09).
The Refrigerator category which had been doing well since its launch, continued this year also. Your Company achieved growth by over 50% in this category, though on a small base. However the profit margin was affected due to increase in per unit price and high price of US Dollar.
As shared above your Company has negative growth in the segment of ductable air conditioners. However in Chiller segment, which is a trading business, Company achieved growth by around 13%. This growth again has come on a small base.
This year has been the most dynamic and challenging year in the context of Indian Business .There was an increase in metal prices and US dollar prices which affected adversely. The economy experienced stow down in fresh investments. Some impact has started to mellow down by the end of the financial year. The metal prices at least had shown some down side from the peaks of the year. Dollar also ended the year with at least some stability. Your Company will continue to strive to serve the Indian consumer in spite of the above downturns and impacts. This has been demonstrated as Company was amongst few companies which decided to go ahead with new launch of Spilt Air conditioners at a very early stage of the season 2009. Company completed launches for the new products by the 1st week of February. This was much ahead of the competition.
Your Company has successfully entered into 25th year of cooling India. It has seen lots of opportunities and challenges during this tenure. Company is now increasing the production capacity by constructing a new factory at Kadi (Gujarat), this will help meeting growing demand of its products.
Finally, on behalf of the Board of Directors of Your Company. I convey my sincere gratitude to all customers, investors and other stakeholders for the support and confidence, and assure you of our commitment to strive for bigger achievements in the coming years.
