HFCL (HFCL) Q4 98/99 earnings summary

Executive summary

• FY1998-99 sales, services and other income reached Rs.415.24 crore; net profit rose 154% YoY to Rs.35.95 crore, both record highs. The chairman cited lower other income as evidence of a shift toward core operations.

• Growth reflected stronger telecom equipment demand, major DoT and MTNL tender wins, and expansion of turnkey services, R&D and software activities.

Financial highlights

• Sales and services were Rs.399.03 crore versus Rs.188.57 crore; other income was Rs.16.20 crore versus Rs.21.78 crore.

• Profit before tax was Rs.40.18 crore versus Rs.23.19 crore; profit for the year was Rs.35.95 crore versus Rs.14.14 crore.

• Finance charges increased to Rs.30.44 crore from Rs.18.66 crore; depreciation was Rs.6.91 crore versus Rs.6.99 crore.

• Proposed dividends: 10% on equity shares, plus 14.5% and 14% on cumulative redeemable preference shares.

Outlook and guidance

• Current-year Q1 net profit rose 205% YoY to Rs.8.33 crore from Rs.2.73 crore; turnover increased to Rs.77.35 crore from Rs.70.59 crore.

• Orders under execution included Rs.42 crore for 6GHz and 11GHz SDH radio; purchase orders totaled Rs.22 crore for STM-1 optical line terminal equipment, with an advance order of Rs.100 crore for STM-16 systems.

• Commercial supplies of CorDECT and CDMA wireless local loop systems were expected after trials; 15GHz and 23GHz cellular PDH radios were being prepared for launch.

• Expansion facilities were nearly complete; sufficient prior capex was expected to support growth through higher capacity utilisation and lower future capex.