Garware Hi-Tech Films (500655) Q4 00/01 earnings summary

Executive summary

• FY2000-01 net loss was Rs 5,949.51 lakh, versus Rs 5,944.03 lakh in FY1999-2000; persistent industry overcapacity and depressed film prices weighed on results.

• Cash losses left the business unable to pay interest or principal to banks and financial institutions; a lender-appointed restructuring review was under consideration.

Financial highlights

• Sales including excise duty rose to Rs 34,080.89 lakh from Rs 30,377.62 lakh; total income was Rs 54,141.89 lakh, including inter-divisional transfers.

• Loss before depreciation widened to Rs 3,419.55 lakh from Rs 2,760.04 lakh; depreciation was Rs 3,076.07 lakh and reported net loss was Rs 5,949.51 lakh.

• Interest expense increased to Rs 7,763.38 lakh from Rs 6,921.20 lakh; cash flow from operations was negative Rs 768.31 lakh after interest paid.

• Export benefits of Rs 1,814.57 lakh under DEPB were accrued against the year’s exports; prior-year adjustments added Rs 546.11 lakh to the reported loss calculation.

Outlook and guidance

• KPMG concluded that potential was strong given market acceptance, broad film grades and exports at 45% of turnover; it expected suitable financial restructuring to enable a return to profit.

• The restructuring report remained under review by lenders; performance in the quarter ended 30 June 2001 had improved versus the corresponding prior-year quarter.

• Export marketing was being consolidated, with regional market specialists engaged to build overseas customer coverage and maintain exports’ share of production.