HEG Advanced Materials (HEGAM) Q4 02/03 earnings summary

Executive summary

• FY03 turnover was Rs. 564.89 crore and net profit rose 20% YoY to Rs. 37.28 crore, supported by exports, cost control and operating efficiencies.

• Graphite electrodes remained the core growth driver; strategy focused on expanding graphite capacity and exiting non-core textile operations.

Financial highlights

• Turnover was Rs. 564.89 crore vs Rs. 563.49 crore; exports were Rs. 307.55 crore vs Rs. 325.43 crore, equal to 54.44% of turnover.

• PBIDT fell to Rs. 86.14 crore from Rs. 94.67 crore; PBT rose to Rs. 40.50 crore from Rs. 38.11 crore and PAT to Rs. 37.28 crore from Rs. 30.94 crore.

• Net turnover after excise was Rs. 536.83 crore; other income increased to Rs. 15.03 crore from Rs. 8.99 crore, while stocks decreased by Rs. 8.52 crore.

• Net worth increased to Rs. 246.99 crore from Rs. 219.72 crore; total loans declined to Rs. 205.45 crore from Rs. 287.60 crore.

Outlook and guidance

• Outlook was positive, with expectations for strong operating and financial performance on export contribution, efficiency gains and lower cost of capital.

• Graphite expansion Phase 1 is planned to raise capacity to 48,000 MT/year by FY05 at an estimated Rs. 220 crore; Phase 2 targets ~60,000 MT/year.

• A 25 MW coal-based power plant, estimated at Rs. 90 crore, is planned to synchronize with the graphite expansion commissioning.

• Sponge iron capacity is planned to rise above 100,000 MT/year through Rs. 12 crore of kiln and WHRS additions, expected to complete by March 2004.