KARACHI: Siemens (Pakistan) Engineering Co. Limited on Monday issued a ‘profit warning,’ saying that the company’s profitability for the financial year ending on Sept 30, 2014, “is adversely affected by multifarious reasons and as a result the company expects to report loss.”

The Siemens provided information to investors under ‘material information’ disclosure rule.

The company added that the information was based on “the company’s preliminary assessment and remained subject to finalisation of financial statements, audit and necessary adjustments, if any.”

Siemens stated that the financial results for FY14 would be circulated (duly approved by the board) within the stipulated time.

In early March this year, Siemens Pakistan had announced that the company had decided to sell its transformer business.

The company, a giant on the KSE’s general industrial sector with Rs17 billion in total assets, had also agreed “in principle to the sale of company’s land and buildings situated at Estate Ave­nue, Sindh Industrial Trading Estate Karachi, Pakistan, in one or more parcels.”

The annual accounts for the year ended Sept 30, 2013, had revealed that the company had incurred employee separation cost of Rs464 million which significantly affected profit of the company.

For FY13, Siemens incurred loss before tax amounted to Rs821m. Net sale also declined in 2013 to Rs13bn, from Rs13.8bn YoY.

In the trading on Monday, the share in Siemens Pakistan declined by Rs8.50 to close at Rs1,119.

Market experts, however, took notice of the fact that Siemens had issued a ‘profit warning’ which though a regular feature in the developed markets of the world, was a practice rarely pursued by local corporates.

Published in Dawn, September 30th , 2014