Hawkins Cooker (508486) Q4 97/98 earnings summary

Executive summary

• FY1997-98 total income rose 6.4% to Rs.1,072.2 million; profit after tax fell 16% to Rs.39.6 million amid higher marketing costs and the end of Jaunpur’s Section 80-I tax benefit.

• New pressure cooker and cookware launches were well received; exports were broadly stable after 53% growth in FY1996-97.

Financial highlights

• Sales were Rs.1,068.3 million versus Rs.1,004.0 million; total income was Rs.1,072.2 million versus Rs.1,007.9 million.

• Profit before tax was Rs.51.6 million versus Rs.58.7 million; profit after tax was Rs.39.6 million versus Rs.47.0 million.

• Advertising expense rose to Rs.92.5 million from Rs.75.9 million; discount expense increased to Rs.51.4 million from Rs.36.2 million.

• FOB exports were Rs.80.6 million versus Rs.80.2 million; foreign exchange used was Rs.22.0 million versus Rs.13.5 million.

Outlook and guidance

• Actual FY1997-98 income of Rs.1,072 million, PAT of Rs.39.6 million and EPS of Rs.8.58 fell short of forecast Rs.1,135 million, Rs.51.0 million and Rs.11.35, respectively, due to tough market conditions.

• R&D plans focus on quality improvement, cost reduction and new products through continued support of the R&D Centre and Test Kitchen.

• Final dividend of Rs.2 per pre-rights share and 71.78 paise per rights share was recommended; with interim dividend, total FY dividend remains Rs.4 per share.