EPL (500135) Q4 98/99 earnings summary

Executive summary

• FY1998-99 results held broadly steady despite an industrial slowdown and weaker demand after major capacity additions; market position was maintained through cost reduction, product innovation and customer diversification.

• Global operations advanced: China and Egypt became profitable, while a German joint venture and a wholly owned Nepal subsidiary expanded the international footprint.

Financial highlights

• Gross income was Rs 1,865.52 million, up from Rs 1,806.81 million; sales and services were Rs 1,858.87 million versus Rs 1,799.14 million.

• Profit before tax was Rs 323.12 million versus Rs 327.49 million; profit after tax was Rs 260.62 million versus Rs 259.99 million.

• Cash profit rose to Rs 543.28 million from Rs 460.90 million; dividend was 54%, totaling Rs 82.12 million, including interim dividend.

Outlook and guidance

• Directors expected strong growth as demand recovered, citing capacity and market positioning established in prior years.

• Germany joint venture planned to acquire existing tubing operations and had secured a five-year tube supply contract; Nepal subsidiary was slated to start up in August 1999.

• China outlook was described as promising after supplier approvals from P&G and Unilever; expanded tubing capacity was available for 1999.

• Egypt expected further regional growth, with additional investment likely to expand capacity as demand developed.