ESAB India (ESABINDIA) Q4 2002 earnings summary

Executive summary

• Turnover grew ~7% on an annualized basis, but the 12-month year ended with a Rs116.2m net loss amid exceptional tax and retirement-benefit provisions.

• Sluggish demand and price competition persisted; stronger H2 demand, especially from automotive and infrastructure, supported production recovery.

Financial highlights

• Net sales were Rs1,250.3m and total income Rs1,266.4m for 12M 2002; the comparison period covers only 9M 2001 and is not comparable.

• Loss before tax was Rs146.5m; net loss was Rs116.2m; basic and diluted EPS were -Rs7.55, versus -Rs3.35 for 9M 2001.

• Provisions included Rs58m for disputed prior-year sales tax, Rs24m for potential prior-year income tax, and ~Rs21m for retirement-benefit deficits.

• Exports increased 31%; reported export turnover was Rs80.0m versus Rs45.8m in the 9M 2001 period.

Outlook and guidance

• Welding consumables, equipment and cutting-products demand was expected to improve in 2003, supported by infrastructure, steel consumption and capital investment.

• Management expressed confidence in using its product range, distribution network and technology base to improve performance; a prolonged Iraq conflict could weaken demand.