Bosch Home Comfort India (523398) Q4 2005 earnings summary

Executive summary

• Returned to profitability after four years, posting net profit of Rs 56.94m for FY ended Mar 31, 2005; revival initiatives, product launches and premium positioning supported the turnaround.

• Operating profit before depreciation, interest and tax reached Rs 125.17m, up 136% versus Rs 53m for the 12 months ended Mar 31, 2004.

Financial highlights

• Total income was Rs 2,425.83m for FY 2004-05; profit before tax and net profit were both Rs 56.94m, with no current-tax provision due to brought-forward losses and unabsorbed depreciation.

• Net profit of Rs 56.94m compared with a Rs 55m loss for the year ended Mar 2004, as cited in the operating review; the financial statements show a Rs 248.28m loss for the prior 18-month period.

• Operating cash flow was positive Rs 48.96m, versus negative Rs 228.05m for the previous 18-month period; cash and cash equivalents ended at Rs 56.99m.

• No equity dividend was proposed in view of accumulated losses of Rs 547.90m at Mar 31, 2005.

Outlook and guidance

• Indian AC industry growth was expected to exceed 15% annually over the next three years; product prices were expected to stabilize despite continued pressure on key inputs.

• Long-term priorities included new models, quality improvement, customer satisfaction and shifting toward packaged ACs, chillers and Set Free systems with higher operating margins and less seasonality.

• Export outlook was cautious, with increased price pressure and conservative volume expectations despite export growth of over 38% in FY 2004-05.