GE Vernova T&D India (522275) Q4 12/13 earnings summary

Executive summary

• FY13 was described as a consolidation year: market leadership retained for a fifth consecutive year, with the highest-ever order book and a balanced mix across key markets.

• Order selection prioritized margins; orders worth over Rs 11 billion were declined due to poor margins.

Financial highlights

• Net sales were Rs 31,518.77 million for FY13; prior-period sales of Rs 41,390.70 million covered 15 months and are not comparable.

• Operating profit before finance cost was Rs 1,815.70 million, or 5.8% of net sales; prior 15-month period: Rs 3,286.72 million, or 7.9%.

• Profit before exceptional items and tax was Rs 1,056.06 million; PBT was Rs 1,226.21 million and PAT Rs 841.08 million.

• Basic and diluted EPS were Rs 3.52 versus Rs 6.79 in the prior 15-month period; periods are not strictly comparable.

• Net cash from operating activities was Rs 4,027.94 million; borrowings declined by Rs 1.8 billion and order backlog was around Rs 62 billion.

Outlook and guidance

• Transmission-sector outlook was positive but challenging; a strong order book and expected easing of constraints supported confidence in continued value delivery.

• Grid investments in HVDC, grid-stability equipment, Smart Grid, 765 kV and 1200 kV technologies were expected to support opportunities in FY14 and beyond.

• Management expected continued market contraction and margin pressure for some time, while targeting expanded customer reach, market share and capacity in emerging technologies.