HBL Engineering (517271) Q4 02/03 earnings summary

Executive summary

• FY ended 31 Mar 2003 gross sales rose 15% YoY and operating profit before interest and depreciation rose 17%; net profit declined to Rs.1,029 lakh from Rs.1,154 lakh.

• Domestic price and margin pressure was offset by higher volumes, better procurement and operational efficiencies; defence-product sales also supported performance.

Financial highlights

• Gross sales reached Rs.20,271 lakh versus Rs.17,508 lakh; operating profit before interest and depreciation was Rs.2,953 lakh versus Rs.2,521 lakh.

• Net profit was Rs.1,029 lakh versus Rs.1,154 lakh; EPS was Rs.5.13 versus Rs.5.75.

• Excluding Rs.279 lakh of VRS expense and Rs.83 lakh of investment-sale losses, stated EPS would have been Rs.6.93.

• Consolidated gross sales were Rs.20,588 lakh and consolidated net profit was Rs.1,012 lakh for FY 2002-03.

Outlook and guidance

• Domestic battery demand was described as stable, but prices and margins were expected to remain under strain; plans included new products, R&D and export-market expansion.

• Nickel-cadmium battery export orders had been secured for the new export-oriented unit, with exports expected to begin in FY 2003-04; the lead-acid export unit was deferred.

• Management expressed confidence in maintaining performance through product additions, overseas sales establishments and improved product quality.