Galaxy Surfactants (GALAXYSURF) Q4 04/05 earnings summary

Executive summary

• FY05 net sales rose 27.05% to Rs 20,677.54 lakh, while PBT fell to Rs 1,682.10 lakh and PAT to Rs 1,052.86 lakh amid input-cost, currency and expansion-related pressures.

• Exports grew 57% and reached 40% of sales; capacity additions, a US office and product development supported the global-growth strategy.

Financial highlights

• Net sales Rs 20,677.54 lakh vs Rs 16,275.11 lakh; gross profit before interest and depreciation Rs 3,276.12 lakh vs Rs 3,182.36 lakh.

• PBT Rs 1,682.10 lakh vs Rs 2,244.03 lakh; net profit after tax Rs 1,052.86 lakh vs Rs 1,553.66 lakh.

• Interest and finance charges increased to Rs 690.10 lakh from Rs 284.54 lakh; depreciation rose to Rs 903.92 lakh from Rs 653.79 lakh.

• Equity dividend recommended at Rs 2.50/share (25%) vs Rs 5/share (50%); total outflow including dividend tax Rs 244.12 lakh.

Outlook and guidance

• Domestic business expected to track Indian Home and Personal Care market growth; first-quarter FY06 performance was cited as indicative of the trend.

• Export growth expected to continue in line with FY05; Phase II EOU expansion was planned to become operational by end-August 2005.

• New products, applications and customer development were targeted to contribute at least 25% of sales; cost and profit improvement programs were underway.

• mySAP ERP implementation was expected to finish by March 2006, with planned investment of Rs 250 lakh.