Bata India (500043) Q4 01/02 earnings summary

Executive summary

• FY ended Dec. 31, 2002: sales and other income fell to Rs7,047.9m from Rs7,761.9m; net loss was Rs74.1m versus net profit of Rs39.8m.

• Operational losses in the first nine months were arrested in Q4; management cited restructuring and new-product measures to support recovery.

Financial highlights

• Sales were Rs6,941.9m versus Rs7,599.8m; profit before tax was a loss of Rs112.0m versus profit of Rs24.6m.

• Net loss was Rs74.1m versus net profit of Rs39.8m; basic and diluted EPS was negative Rs1.44 versus Rs0.77.

• Other income fell to Rs106.0m from Rs162.1m; FY 2002 included a Rs34.8m gain on disposal of fixed assets.

• Interest expense declined to Rs83.2m from Rs90.9m; depreciation was Rs130.8m versus Rs134.9m.

Outlook and guidance

• 2003 profitability expectations were modest; management targeted ~10% annual business growth and profitability growth of at least 120% YoY from 2004 as initiatives take effect.

• Priorities included repositioning toward marketing, quality sales and consumer satisfaction, alongside cost reduction and tighter control of cash-drain areas.