ESAB India (ESABINDIA) Q4 2005 earnings summary

Executive summary

• FY2005 net sales rose 26.8% YoY to Rs. 2,381.6m; profit before tax increased to Rs. 581.8m and profit after tax to Rs. 397.1m. The year included a Rs. 45.3m gain on sale of Kalwa leasehold rights.

• Stronger demand, improved equipment performance and operating cash generation supported earnings and a proposed special dividend; investment in capacity, products and management capabilities continued.

Financial highlights

• Net sales Rs. 2,381.6m vs Rs. 1,878.8m in 2004; gross sales Rs. 2,716.0m vs Rs. 2,135.6m.

• EBITDA Rs. 631.4m vs Rs. 391.4m; PBT Rs. 581.8m vs Rs. 331.0m; PAT Rs. 397.1m vs Rs. 203.5m.

• Excluding the Rs. 45.3m leasehold-rights gain, reported PBT includes a material non-recurring disposal profit; other income rose Rs. 14.6m, chiefly from interest on operating cash.

• Operating cash flow Rs. 342.3m vs Rs. 293.3m; cash and bank balances Rs. 562.8m at year-end vs Rs. 257.8m.

• Proposed special dividend 260%; total payout including dividend distribution tax Rs. 456.4m, subject to shareholder approval and not indicative of future distributions.

Outlook and guidance

• 2006 priorities: cost focus, project management, technology absorption, management of new products and performance management.

• Growth prospects depend on steel consumption and manufacturing and infrastructure activity; new products and capacity additions offer opportunities.

• A new equipment manufacturing facility at Irungattukottai was under development; international affiliate technology transfers and licences were being pursued.