Hindustan Construction Company (500185) Q4 99/00 earnings summary

Executive summary

• FY ended 30 June 2000: turnover fell 15% to Rs.530.77 crore, while PBT rose 132% to Rs.24.60 crore and PAT rose 131% to Rs.21.40 crore.

• Higher profitability reflected improved project management, operating efficiency, equipment utilisation and procurement despite weak infrastructure spending and delayed project awards.

Financial highlights

• Turnover was Rs.530.77 crore versus Rs.625.40 crore; operating income excluding the Nathpa Jhakri JV share was Rs.469.99 crore versus Rs.558.47 crore.

• PBT increased to Rs.24.60 crore from Rs.10.61 crore; PAT rose to Rs.21.40 crore from Rs.9.25 crore.

• PBDIT increased to Rs.85.39 crore from Rs.59.74 crore; interest was Rs.39.14 crore and depreciation Rs.21.65 crore.

• Operating margin rose to 18.2% from 10.7%; construction expenses fell to 66% of sales from 77%.

• Interim dividend of Rs.2 per share, including a Rs.0.50 Platinum Jubilee component, was paid; it was recommended as final dividend, a 20% rate.

Outlook and guidance

• Management expected operating income to improve in 2000-01 and rise significantly in 2001-02, based on the order book and expected infrastructure awards.

• Target operating margin was above 20%, with further ROCE improvement targeted for 2000-01.

• Lowest bids on projects valued at over Rs.1,290 crore awaited decisions; tenders submitted for 20 projects worth Rs.4,232 crore were also pending.