HEG Advanced Materials (HEGAM) Q4 03/04 earnings summary

Executive summary

• FY 2004 growth followed the exit from textiles and a renewed focus on graphite electrodes; buoyant demand, higher prices and operating efficiencies supported improved earnings.

• Rishabhdev textile operations were demerged effective 1 April 2003; FY 2003 comparisons exclude the unit where stated.

Financial highlights

• Gross turnover was Rs 484.95 crore, up 10% YoY on the comparable basis excluding the demerged textile unit.

• PBDT rose 25% to Rs 79.99 crore, PBT increased 50% to Rs 60.64 crore, and PAT excluding extraordinary items grew 37% to Rs 51.02 crore.

• EPS increased 37% to Rs 12.66; reported net sales were Rs 462.27 crore versus Rs 536.83 crore, with prior-year figures not strictly comparable after the demerger.

• Interest expense fell to Rs 7.72 crore from Rs 22.31 crore; EBITDA was Rs 87.71 crore versus Rs 76.81 crore on the reported highlights comparison.

Outlook and guidance

• FY 2005 outlook was favourable, with higher graphite-electrode price realisations expected and growth-led performance anticipated on improved pricing and marginally higher capacity availability.

• Graphite capacity expansion was planned in two phases: 52,000 MTPA before FY 2005-end, then 60,000 MTPA before FY 2006-end.

• A new R&D facility was expected to become operational by FY 2004-05-end, targeting product development and process efficiency.