APAR Industries (APARINDS) Q4 03/04 earnings summary

Executive summary

• FY04 net sales, net of excise, rose 18% YoY to Rs 6,393.71m; net profit increased 90% to Rs 294.49m, with EPS at Rs 13.86.

• Performance benefited from higher sales, lower financial costs and a Rs 43.05m profit on fixed-asset sales; the exchange-rate difference was a net gain of Rs 98.82m.

Financial highlights

• Revenue, net of excise, was Rs 6,393.71m vs Rs 5,424.72m; other income was Rs 358.89m vs Rs 185.26m.

• Profit before tax was Rs 317.54m vs Rs 194.44m; profit after tax was Rs 294.50m vs Rs 154.71m.

• Profit before interest, depreciation, tax and extraordinary expenditure was Rs 461.24m vs Rs 427.79m.

• Excluding excise, operating expenses included Rs 5,103.10m of raw materials and components consumed; interest and discounting charges were Rs 150.05m vs Rs 157.57m.

• Reported other income included a Rs 43.05m fixed-asset disposal gain; net exchange-rate difference was a gain of Rs 98.82m vs Rs 24.56m in FY03.

Outlook and guidance

• Management expected reasonable FY05 performance, subject to unforeseen risks, and was developing expansion plans to address market forces.

• Polymers plans emphasized continuous polymerisation, new NBR blends and grades, cost reduction, value-added products and phased Valia capacity expansion under consideration.

• Higher Silvassa oil capacity was expected to support price realization through tax benefits and lower overhead; export development remained a focus amid increased competition.

• Conductors expected profitability improvement from stabilised Silvassa rolling-mill capacity, cost efficiency and productivity gains.