Borosil Renewables (BORORENEW) Q4 97/98 earnings summary

Executive summary

• FY98 gross sales, including excise duty, were Rs 5,646.38 lacs versus Rs 5,575.85 lacs; net profit fell to Rs 14.93 lacs from Rs 147.63 lacs.

• Production was disrupted by mass absenteeism at Marol and technical problems with furnace boosting; labor conditions were normal by year-end and boosting restarted in June 1998.

• No dividend was recommended; directors cited low profits and the need to conserve resources.

Financial highlights

• Profit before tax was Rs 18.02 lacs versus Rs 165.66 lacs; tax provision was Rs 3.09 lacs versus Rs 18.03 lacs.

• Gross profit after interest was Rs 332.89 lacs versus Rs 448.95 lacs; depreciation rose to Rs 314.87 lacs from Rs 283.29 lacs.

• Other income included Rs 75.93 lacs written back; prior-year dividend provision and related tax of Rs 75.44 lacs were also no longer required and written back.

• Exports increased to Rs 250.09 lacs from Rs 132.48 lacs, with new markets developed in South and East Africa, Egypt, the Middle East, the UK and Iran.

Outlook and guidance

• Production was expected to improve markedly in FY99 following the June 1998 restart of furnace boosting, which had begun delivering higher production.

• Natural gas supply under a contract with Mahanagar Gas was expected to reduce fuel costs once supply commenced.

• Export sales were expected to be sustained in the current year.