Godrej Consumer Products (GODREJCP) Q4 05/06 earnings summary

Executive summary

• FY 2005-06 net-of-excise sales rose 17% to Rs 657.3 crore; PAT increased 40% to Rs 120.7 crore, with operating PBIDT margin expanding to 22.2% from 19.0%.

• Organic growth and supply-chain efficiencies accompanied the first overseas acquisition, Keyline Brands, establishing an international platform and adding established consumer brands and trade channels.

• Godrej-branded sales rose 20% to Rs 634.4 crore; toilet soaps remained the largest business, while toiletries recorded the fastest growth among the reported categories.

Financial highlights

• Net sales, net of excise, were Rs 657.3 crore versus Rs 562.7 crore; total income was Rs 666.0 crore versus Rs 569.1 crore.

• PBIDT rose 37% to Rs 146.1 crore; PBT reached Rs 131.3 crore versus Rs 93.8 crore, and PAT was Rs 120.7 crore versus Rs 86.1 crore.

• Net profit after prior-year tax adjustments was Rs 121.2 crore versus Rs 89.6 crore; EPS increased to Rs 21.45 from Rs 15.81.

• Consolidated net sales, net of excise, were Rs 699.7 crore; consolidated PBT was Rs 132.1 crore and profit after tax was Rs 120.8 crore, or Rs 121.3 crore after tax adjustments.

• Other income included Rs 5.6 crore in claims received, Rs 1.5 crore profit on fixed-asset sales and Rs 0.03 crore discount on deferred sales-tax prepayment.

Outlook and guidance

• FY 2006-07 outlook was supported by expectations of higher disposable incomes, consumer spending and improving living standards; FMCG demand was expected to remain favorable.

• Planned spending of about Rs 110 crore for expansion or new soap, hair-colour and toiletries facilities, while pursuing excise and income-tax benefits.

• Priorities included consumer-focused innovation, distribution expansion, productivity gains and continued exploration of domestic and overseas acquisitions in personal and household care.