Garware Technical Fibres (509557) Q4 97/98 earnings summary

Executive summary

• FY98 PBT rose to Rs 664.10 lakh from Rs 226.02 lakh; PAT increased to Rs 565.33 lakh from Rs 189.87 lakh, exceeding the targeted profit of Rs 6 crore.

• Profitability gains reflected lower interest costs, stronger domestic market share and tighter purchasing controls; sales were Rs 11,920.84 lakh, broadly level with FY97.

• The board recommended an 18% dividend, up from FY97’s pro rata 15%.

Financial highlights

• Sales were Rs 11,920.84 lakh versus Rs 11,926.63 lakh; other income was Rs 147.32 lakh versus Rs 209.94 lakh.

• Profit before depreciation and taxation increased to Rs 1,432.46 lakh from Rs 1,009.76 lakh; depreciation was Rs 768.36 lakh versus Rs 783.74 lakh.

• Interest expense declined to Rs 824.80 lakh from Rs 1,115.69 lakh; tax provision increased to Rs 98.77 lakh from Rs 36.15 lakh.

• EPS was Rs 2.83 versus Rs 0.95; proposed dividend absorbed Rs 359.36 lakh versus Rs 287.70 lakh.

• Net foreign exchange earnings were Rs 845 lakh versus Rs 235 lakh; reported FOB export value was Rs 3,102.74 lakh versus Rs 3,384.92 lakh.

Outlook and guidance

• Strong and rapidly growing demand for fishnet, geo-net and sports-net webbings supported plans to expand capacity; webbings utilization reached 98% in FY98.

• Growth opportunities in the USA, Canada, Mexico and neighboring markets followed removal of US import quotas for several products; a US branch opened in February 1998.

• Export-market development and broader product offerings were priorities in response to European anti-dumping duties and global competition.

• Overseas order at Garware Elastomerics was expected to use 70% of capacity for two years from June 1998, supporting an improved future performance outlook.