GE Vernova T&D India (522275) Q4 2006 earnings summary

Executive summary

• FY 2006 results cover 12 months and include the three merged T&D entities; the prior-period comparison covers nine months, so reported totals are not directly comparable.

• Operations grew across several product businesses; Systems returned to profitability, while investment in capacity and facilities supported the growth plan.

• Proposed dividend of 60%, or Rs. 6 per share, for the year ended December 31, 2006.

Financial highlights

• Net sales and services Rs. 16,058.1m; operating profit Rs. 2,018.0m; profit before tax Rs. 2,088.8m; profit after tax Rs. 1,370.2m.

• Basic EPS Rs. 34.35 and diluted EPS Rs. 28.65; FY 2005 EPS was Rs. 9.09 for a nine-month period.

• Operating profit included Rs. 97.5m gain on sale of the non-T&D business; employee voluntary separation and related costs were Rs. 26.7m.

• Operating profit was 12.6% of net sales, versus 8.0% in the table’s 12-month T&D-only comparator.

Outlook and guidance

• Current-year order book described as satisfactory; growth momentum expected to continue through existing-plant capacity additions and new manufacturing sites.

• New transformer factory at Vadodara targeted commercial production in Q4 2008; new Hosur instrument transformer facility expected to start in Q4 2008.

• New Padappai high-voltage switchgear unit expected to start commercial production in Q1 2009; manufacturing at Perungudi to move there over time.

• Outlook supported by power-sector investment and the merger’s expanded end-to-end T&D offering; stated commitment to profitable growth.