Birla Corporation (500335) Q4 02/03 earnings summary

Executive summary

• FY03 returned to profit after five loss-making years; higher productivity and cost controls offset weaker cement realizations and lower jute revenue.

• Turnover was nearly flat at Rs.1,124.20 crore; cash profit rose 13% to Rs.38.86 crore as lower interest costs supported the turnaround.

Financial highlights

• Standalone sales were Rs.1,124.20 crore vs Rs.1,123.91 crore; total income was Rs.1,147.40 crore vs Rs.1,144.63 crore.

• Operating profit was Rs.70.42 crore vs Rs.70.65 crore; profit before tax was Rs.6.66 crore vs a loss of Rs.0.72 crore.

• Net profit was Rs.4.19 crore vs a loss of Rs.0.76 crore; reported basic and diluted EPS was Rs.0.54 vs a loss of Rs.0.10.

• Interest expense fell to Rs.31.56 crore from Rs.36.21 crore; cash profit rose 12.82% to Rs.38.86 crore.

Outlook and guidance

• Cement demand was expected to grow ~8% annually, with prices likely to improve as demand-supply conditions strengthen; infrastructure and housing were cited as demand drivers.

• Cement plans included further blended-cement growth, production-cost savings and capital expenditure for efficiency, cost reduction and capacity expansion.

• Jute performance was expected to improve with productivity-linked wages, while value-added products and exports were priorities amid weaker conventional-bag demand.

• Auto trims outlook was described as encouraging, supported by fresh orders and expansion into bus interiors, multi-utility vehicles and non-automotive markets.