Garware Hi-Tech Films (500655) Q4 01/02 earnings summary

Executive summary

• FY 2001-02 marked an operational turnaround after three years of losses; operating profit before interest and depreciation nearly doubled YoY, supported by higher production efficiency, product mix and debt relief.

• Operations and profitability tracked the rehabilitation package projections; interest payments to lenders resumed regularly from April 2001.

Financial highlights

• Turnover was Rs.369.72 crore vs Rs.340.81 crore in FY 2000-01; exports were Rs.115.70 crore vs Rs.133.77 crore.

• Net profit was Rs.7.81 crore vs Rs.5.95 crore loss; profit before prior-period items was Rs.2.08 crore, with Rs.6.15 crore of net prior-period credits contributing to reported profit.

• Interest expense fell to Rs.51.95 crore from Rs.77.63 crore; depreciation was Rs.32.76 crore vs Rs.30.76 crore.

• Operating cash inflow was Rs.52.19 crore vs Rs.11.35 crore; cash and bank balances closed at Rs.3.91 crore, while cash-credit balances were Rs.78.99 crore.

Outlook and guidance

• H1 FY 2002-03 performance through September was satisfactory and in line with expectations; management expected the improvement to continue in H2.

• Domestic packaging-film demand was expected to grow 15-20% in the current year; several specialty products were scheduled for market introduction within 6-12 months.

• Reviews of U.S. and EU anti-dumping measures could be sought the following year; reduced duties were viewed as necessary to restore better market access for plain-film exports.