NRB Reports Fiscal Year 2006 Results

NRB Bearings Ltd. (India; BSE: 530367) announced results for fiscal year 2006, the period ended March 31, 2006. For the year, sales jumped 19%, to Rs 2.9 billion (USD $62.9 million) from Rs 2.5 billion (USD $54.3 million) in 2005. Net profit for 2006 hit Rs 340.2 million ($7.4 million), up almost 22% from 2005's Rs 272.9 million ($5.9 million). SNL Bearings, (BSE: 505827) a publicly-traded NRB subsidiary, reported a net profit of Rs 10.6 million ($231,000) for fiscal 2006 on Rs 136.4 million sales ($2.9 million). Sales were up 11% over 2005, but profit more than quadrupled. NRB acquired SNL in 2000, but its performance and accumulated losses remain a problem for NRB. SNL shares traded as high as Rs 43.5 in August 2005, but recently hit a 52-week low of Rs 13.85. NRB's share price situation is reversed from SNL. From a 52-week low in August 2005 of Rs 260.05, the company's shares recently hit a 52-week high of Rs 654.5. About the overall results, NRB President, Harshbeena Zaveri, said: "As always, our focus will continue to remain on the automotive OEM customer, in India and overseas. We have made significant strides to be seen as a responsive supplier and a competitive producer of needle and cylindrical bearings. The ongoing investment into R&D and Engineering has driven our capabilities to develop products for new customers as well as new applications at existing customers." A month ago, NRB announced a three-year, $22 million program to more than double its manufacturing capacity for needle roller bearings, and more than triple its capacity for cylindrical roller bearings. Founded in 1965 as a joint venture with French needle bearing manufacturer Nadella, NRB now has production facilities in Thane, Aurangabad, Jalna, Waluj, and Hyderabad. NRB manufactures needle roller, thrust and cylindrical roller bearings; the majority of its output -- 85% -- goes to automobile and light truck manufacturers. In the Indian market, NRB holds a 13% market share and is also key supplier to the textile and rail industries. Some production is exported to European automakers such as Renault and Volvo, but exports currently account for only 8% of sales. Going forward, NRB has established a far more aggressive strategy aimed at building export sales. For example, it has nearly doubled the R&D budget, in large part to fund the work needed to capture additional European sales and market share. Domestically, its largest customer is heavy truck manufacturer Tata Motors Ltd., followed by two-wheeler producers Bajaj Auto and Hero Honda. NRB is also seeking type approval by GM, Volvo and others. Until mid-November 2005, Timken owned 26% of NRB, a legacy of its acquisition of Torrington which had acquired Nadella. Timken divested that 2.5 million share ownership to two Sahney family-controlled entities for Rs 230 per share, or $13 million. The Sahney family has since reduced its NRB holdings from 85% to 75%, to comply with BSE stock market requirements limiting ownership stakes.