Honeywell Automation India (517174) Q4 2005 earnings summary

Executive summary

• FY2005 order growth 71%; reported sales growth 25% in the performance highlights and 26% in the Directors’ Report, with improved profitability and a better business mix.

• Integration into Honeywell was completed without adverse impact on employee retention, customer relationships or business; global processes were adopted across HR, project management, controls and governance.

Financial highlights

• Net sales Rs 4,930.0m; sales Rs 5,125.2m less excise duty of Rs 195.2m. FY2005 covered 12 months versus 9 months in 2004, limiting direct comparison.

• Operating profit Rs 526.96m, PBT Rs 380.09m and PAT Rs 340.82m; prior-period PAT was Rs 84.92m for nine months.

• Basic and diluted EPS Rs 38.55 versus Rs 9.60 for the nine-month prior period; proposed final dividend Rs 8 per share.

• Performance highlights cited EBITDA growth of 75%; provisions and write-offs for bad debts and obsolete inventory totaled Rs 210m, versus Rs 190m for the prior full year.

Outlook and guidance

• HPS was expected to sustain high growth in FY2006, supported by industrial investment, power generation, metals, refinery expansions and Euro 3/Euro 4 projects.

• Building automation opportunities were linked to construction growth, airport modernization and SEZ investment; security products were expected to grow with rising security awareness.

• Global Services reported multiple overseas turnkey proposals underway after an initial South Africa order; productivity actions aimed to offset foreign-exchange volatility and manpower cost increases.