HFCL (HFCL) Q4 02/03 earnings summary

Executive summary

• FY03 standalone sales fell 8% YoY and net profit declined 33%; consolidated accounts reported a Rs 204.4 crore loss before tax and Rs 145.4 crore loss after minority interest.

• Telecom equipment and turnkey work remained core activities, while telecom services expansion and subsidiary distress weighed on consolidated results.

Financial highlights

• Standalone sales and services were Rs 891.59 crore vs Rs 970.70 crore; net profit was Rs 27.12 crore vs Rs 40.65 crore YoY.

• Standalone finance charges rose to Rs 110.46 crore from Rs 64.05 crore; depreciation was Rs 26.19 crore vs Rs 25.60 crore.

• Consolidated sales and services reached Rs 1,285.26 crore vs Rs 960.92 crore; loss before tax was Rs 204.37 crore vs Rs 136.00 crore.

• Standalone basic EPS was Rs 1.47 and diluted EPS Rs 1.23, down from Rs 3.83 for both measures in FY02.

Outlook and guidance

• Focus remains on transmission and access equipment, turnkey telecom services and indigenous product development through R&D and technical-institute collaboration.

• Telecom tenders from BSNL and MTNL, including WLL CDMA and GSM requirements, were expected to generate substantial business in FY04.

• Telecom density targets of 7 per 100 by 2005 and 15 per 100 by 2010, plus Rs 1,606 billion of planned sector investment, supported demand expectations.

• HTL reported Rs 208 crore of orders and advance orders at Aug 2003, including a Rs 70 crore CorDect order; turnaround depended on funding and revival efforts.