Hero MotoCorp (HEROMOTOCO) Q4 98/99 earnings summary

Executive summary

• FY99 sales and other income reached Rs 1,552.90 crore, up 34%; PBT and PAT each rose 58% to Rs 172.74 crore and Rs 121.37 crore, respectively.

• Motorcycle production was 532,738 units amid sluggish economic conditions; volume grew 31% and market share increased 5 percentage points to 37.5%.

Financial highlights

• Net sales were Rs 1,532.03 crore versus Rs 1,145.33 crore in FY98; total income was Rs 1,552.90 crore versus Rs 1,156.15 crore.

• Profit before tax was Rs 172.74 crore versus Rs 109.54 crore; profit after tax was Rs 121.37 crore versus Rs 76.60 crore.

• FY99 manufacturing and other expenses were Rs 1,345.52 crore; depreciation Rs 22.42 crore and finance charges Rs 7.62 crore.

• US GAAP net income was Rs 1,100.50 million versus Rs 753.04 million; US GAAP EPS was Rs 27.56 versus Rs 37.71 following the 1:1 bonus issue.

Outlook and guidance

• Motorcycle demand was expected to sustain its growth near term; plans called for significant investment in capital equipment and new models over coming years.

• Planned investment was to be funded from internal accruals, with no external borrowing intended for this purpose.

• Higher export sales were expected in FY00 after encouraging trade-fair responses; Guatemala, Chile and Costa Rica were added as markets during FY99.