Huhtamaki India (509820) Q4 2000 earnings summary

Executive summary

• Calendar-year 2000 net sales rose 12.2% YoY, but sharp demand weakness in H2 and rising input costs squeezed value addition and slowed profit growth.

• Hyderabad flexibles expansion was commissioned in October; management targeted low-single-digit sales and bottom-line growth for 2001.

Financial highlights

• Calendar-year net sales were Rs 2,758.9m, up 12.2% YoY; gross sales reached Rs 3,252m versus Rs 3,041m in calendar 1999.

• Calendar-year PBT was Rs 111.2m and PAT Rs 102.9m; management reported PAT growth of 2.8% YoY on a calendar-year comparison.

• EBDT was Rs 284m, up 3.4% YoY; cash profit was Rs 276m versus Rs 260m, and EPS was Rs 7.38 versus annualised Rs 6.72.

• Raw-material costs rose to Rs 1,921.8m, 69.7% of net sales versus 65.1%; value addition fell to Rs 837m, or 30.3% of sales, from Rs 858m, or 34.9%.

Outlook and guidance

• Management expected depressed packaging demand to bottom out and turn around within H1 2001; full-year sales and bottom-line growth were forecast in the low single digits.

• Export growth was expected to remain satisfactory and double digit despite a slowing global economy and lower-priced competition.

• 2001 capex was budgeted at Rs 110m, mainly for committed carryovers, maintenance and support equipment, with a mid-year review for possible cuts or deferral.