Britannia Industries (BRITANNIA) Q4 03/04 earnings summary

Executive summary

• FY ended 31 Mar 2004 sales grew 9% to Rs 14,705m; operating profit rose 22% to Rs 1,478m and PBT before exceptional items rose 37% to Rs 1,963m.

• After exceptional items, PBT was Rs 1,844m and net profit Rs 1,188m, up 25% and 20%, respectively; EPS increased to Rs 42.43 from Rs 38.56.

• Operating margins improved to 10.1% from 9%; bread volumes stabilized and grew 4%, while cake sales increased 23%.

Financial highlights

• Net sales were Rs 14,396m versus Rs 12,958m; gross sales were Rs 14,705m versus Rs 13,491m.

• Operating profit before depreciation and amortisation was Rs 1,702m versus Rs 1,472m; operating profit was Rs 1,478m versus Rs 1,211m.

• Other income rose to Rs 546m from Rs 329m, including Rs 388m net profit on sales of investments and securities.

• Adjusted for exceptional items, PBT was Rs 1,963m and PAT Rs 1,265m; after exceptional items, PBT was Rs 1,844m and PAT Rs 1,188m.

• Operating cash flow was Rs 826m versus Rs 768m; cash flow generation after exceptional items was Rs 1,412m, up 12%.

Outlook and guidance

• Good monsoon prospects were expected to support rural demand and sales of FMCG products and consumer durables.

• Biscuit consumption was expected to continue increasing; profitability depended on faster volume growth and operating-cost control amid rising input costs and limited scope for price increases.

• Planned priorities included aggressive cost management, productivity, import substitution, process and packaging optimisation, and stronger rural distribution and availability.