ESAB India (ESABINDIA) Q4 2004 earnings summary

Executive summary

• 2004 operating performance rebounded sharply: net sales rose 38.3% to Rs.1,878.8m and profit after tax reached Rs.203.5m, versus Rs.7.0m in 2003.

• Growth reflected stronger demand, improved price and product mix, higher volumes, and a turnaround in equipment; no dividend was recommended to conserve resources.

Financial highlights

• Net sales, excluding excise duty, were Rs.1,878.8m versus Rs.1,358.3m; gross sales were Rs.2,135.6m versus Rs.1,542.0m.

• EBITDA was Rs.391.4m, up Rs.291.3m YoY; operating profit was Rs.334.7m versus Rs.22.0m, and PBT was Rs.331.0m versus Rs.6.3m.

• Standalone PAT was Rs.203.5m versus Rs.7.0m; EPS was Rs.13.22 versus Rs.0.45. Consolidated PAT was Rs.203.8m and consolidated EPS Rs.13.27.

• Results included a further Rs.38m provision for potential indirect tax liabilities and a Rs.13m write-back of sundry-debtor provisions; 2003 included a Rs.22.61m charge.

Outlook and guidance

• 2005 welding demand was expected to benefit from infrastructure spending and growth in automotive and consumer durables; consumables growth remained dependent on domestic steel use, particularly sheet metal.

• Production, sales, marketing, and service functions were geared up for expected demand; the equipment business planned a reorganization to improve operating efficiency.

• Steel input costs were expected to stabilize at higher levels; import-duty reductions could pressure average realizations, especially in higher-value products.