Blue Star (500067) Q4 01/02 earnings summary

Executive summary

• FY 2001-02 total income rose 1% to Rs. 517.32 crore; net profit increased 17% to Rs. 27.45 crore despite a weak economy and intense price competition.

• Cost controls, lower interest expense and balance-sheet reduction supported profitability; operating cash flow was Rs. 43.16 crore and year-end borrowings fell to Rs. 12.09 crore.

• A major restructuring of airconditioning and refrigeration operations was completed; benefits from the new divisional structure were expected to emerge in FY 2002-03.

Financial highlights

• Total income was Rs. 517.32 crore versus Rs. 509.82 crore; PBDIT was Rs. 45.83 crore, PBT Rs. 27.33 crore and PAT Rs. 27.45 crore.

• PAT rose 17% YoY and EPS increased to Rs. 13.52 from Rs. 11.58; interest expense fell 36% to Rs. 5.59 crore, saving Rs. 3.10 crore.

• Other income increased to Rs. 13.15 crore from Rs. 7.20 crore, including Rs. 4.00 crore profit on asset sales; the asset-sale contribution is non-recurring.

• Proposed dividend was Rs. 6.50 per share versus Rs. 5.50; the final amount depended on shares outstanding on the record date because the buyback continued.

Outlook and guidance

• Benefits from the focused divisional structure were expected to show in FY 2002-03; the stated priorities included improving competitiveness, customer experience and operating efficiency.

• Leadership positions, stronger market share and growth opportunities in airconditioning, commercial refrigeration and professional electronics were cited as bases for continued business growth.

• New digital window and split airconditioners were under development for launch in FY 2002-03; further product launches and supply-chain integration were planned.