Ambika Cotton Mills (AMBIKCO) Q4 03/04 earnings summary

Executive summary

• FY04 total income rose 10.05% to Rs 9,162.55 lakh; gross profit increased 48.47% to Rs 1,745.93 lakh, and net profit rose 51.05% to Rs 1,231.18 lakh.

• Export turnover fell 15.54% to Rs 5,276.28 lakh as sales were redirected toward stronger domestic prices and margins; exports were 59.00% of turnover versus 76.56% in FY03.

Financial highlights

• Sales were Rs 8,942.79 lakh and other income Rs 219.76 lakh; profit before tax was Rs 1,269.68 lakh and profit after tax Rs 1,231.18 lakh.

• Raw material costs were Rs 4,879.49 lakh; interest expense was Rs 492.09 lakh and depreciation Rs 476.26 lakh.

• Proposed dividend was 16% on equity shares; Rs 1,100 lakh was transferred to general reserve.

Outlook and guidance

• A proposed 14,112-spindle compact-yarn plant, with captive wind power, was estimated to cost Rs 68 crore; Rs 50 crore in term loans was sanctioned and Rs 18 crore planned from internal accruals.

• Management expected demand for quality cotton yarn to improve, supported by TUFS and the scheduled removal of textile quotas from 2005; expansion was intended to strengthen productive capacity.

• The completed wind project was expected to deliver its full benefits in FY05.