CIE Automotive India (532756) Q4 06/07 earnings summary

Executive summary

• FY ended 31 Mar 2007: total income rose 6.2% to Rs 21,701 lakh; operating profit before goodwill and contingency more than doubled, while the year ended in a net loss.

• Chakan operations focused on upgrading and expanding capacity, increasing exports and building a platform for proposed integration with international forging businesses.

Financial highlights

• Net sales rose 6.3% to Rs 2,114 million; total income increased 6.2% to Rs 2,170.1 million.

• PBDIT before goodwill and contingency increased 108.9% to Rs 239.0 million; PBIT before those items rose 154.2% to Rs 154.8 million.

• Net loss was Rs 1,217.85 lakh, versus Rs 1,194.73 lakh; goodwill amortisation of Rs 1,738.53 lakh and contingency provision of Rs 44.71 lakh weighed on results.

• Exports grew 55% and material consumption remained nearly level despite higher raw-material, power and fuel costs.

Outlook and guidance

• Three new presses were expected to be installed by Dec 2007 and operational by end-Q4 FY 2007-08, doubling effective forging capacity to 60,000 MT.

• Exports were targeted to rise from 3.3% of FY 2006-07 net sales to 10% in FY 2007-08; machining capacity for crankshafts and axle parts was planned to triple by FY 2008-09.

• Priorities included integrating international operations, cross-selling, sourcing efficiencies, technology transfer and higher-value production; results were expected from FY 2007-08 onward.

• Management remained committed to the global forging vision for 2009-10, through organic growth and potential value-enhancing acquisitions.