Finolex Cables (FINCABLES) Q4 02/03 earnings summary

Executive summary

• FY2002-03 was a difficult year: operating income was Rs. 4,977.79 million and PAT Rs. 247.18 million, both below the prior year; exports and cost controls supported performance.

• Electrical cables and communication cables remained the core businesses; electrical cable sales grew 15% while communication cable sales fell 61%, mainly amid sharply lower BSNL orders for jelly-filled telephone cables.

Financial highlights

• Operating income, including excise duty, was Rs. 4,977.79 million versus Rs. 6,589.82 million YoY; other income was Rs. 232.79 million and total income was Rs. 5,210.58 million.

• PBT was Rs. 282.23 million versus Rs. 724.46 million; PAT was Rs. 247.18 million versus Rs. 659.48 million.

• Profit before interest, depreciation and tax was Rs. 717.07 million versus Rs. 1,099.21 million.

• Product exports rose 77% YoY to Rs. 838.44 million; export orders included a US$15 million communication-cable contract, subject to possible execution delays.

Outlook and guidance

• Electrical-cable growth expected from construction, automotive and water-resource management; VAT was expected to improve competitive parity with unorganised manufacturers.

• Communication-cable demand expected to benefit from LAN, switchboard and coaxial products; JFTC capacity was expected to be substantially utilised, barring unforeseen circumstances.

• Growth expected in both copper-rod and optic-fibre-cable operations at the wholly owned wire-products subsidiary, supported by infrastructure investment in telecom, power and housing.

• PVC sheets capacity was pruned to contain losses after business failed to grow as expected.