HFCL (HFCL) Q4 04/05 earnings summary

Executive summary

• FY05 standalone sales and services fell to Rs 422.72 crore from Rs 810.09 crore; net loss was Rs 169.88 crore after write-offs and provisions. No dividend was recommended.

• Consolidated revenue was Rs 912.69 crore; loss after minority interest was Rs 190.29 crore.

Financial highlights

• Standalone other income rose to Rs 30.11 crore from Rs 13.48 crore, including reversal of Rs 27.19 crore of prior-year interest under the CDR scheme.

• Standalone finance charges declined to Rs 63.03 crore from Rs 112.38 crore; depreciation increased to Rs 27.08 crore from Rs 25.82 crore.

• Consolidated revenue was Rs 912.69 crore versus Rs 1,123.20 crore; consolidated loss before tax was Rs 211.55 crore.

• Standalone cash loss continued for a second consecutive year; management attributed cash losses mainly to write-offs and provisions on old debtor and advance balances.

Outlook and guidance

• Outlook was described as bright on expected telecom investment; focus remained on transmission and access equipment, IP networking, FWT and turnkey services.

• Product strengthening, new-product development and investment in new technology were planned amid rapid technological change.

• Telecom growth expectations included 250 million lines by 2007, 150 million mobile subscribers by 2007 and broadband targets of 9 million subscribers by 2007 and 20 million by 2010.