Huhtamaki India (509820) Q4 2004 earnings summary

Executive summary

• FY2004 net sales rose 3% YoY to Rs.3,940.2 mn, while PBT fell 11% to Rs.336.5 mn and PAT fell 14% to Rs.241.1 mn amid sharp raw-material inflation.

• Pricing pressure and the decision to exit non-remunerative business constrained sales growth; cost control, product innovation and selective customer expansion helped preserve profitability.

Financial highlights

• Gross turnover was Rs.4,539.1 mn vs Rs.4,431.6 mn; net sales were Rs.3,940.2 mn vs Rs.3,826.2 mn in FY2003.

• PBT was Rs.336.5 mn vs Rs.379.3 mn; PAT was Rs.241.1 mn vs Rs.279.3 mn; EPS declined to Rs.23.23 from Rs.22.27.

• EBDIT declined 6% to Rs.563.6 mn; EBIT was Rs.342.7 mn vs Rs.385.1 mn, and cash profit was Rs.462 mn vs Rs.494 mn.

• Exports increased 17.5% to Rs.532 mn; external customer sales rose 2.6% to Rs.3,618 mn.

Outlook and guidance

• FY2005 expected to remain challenging, with firm raw-material prices and continued selling-price pressure; management expected acceptable full-year performance and better bottom-line results in H2.

• Q1 2005 net sales were Rs.1,011 mn; PBT was Rs.83 mn, including an Rs.18 mn claim settlement, or Rs.65 mn excluding the settlement.

• Double-digit export growth was expected in 2005 and beyond; export sales were targeted to approach 20% of total sales over time.

• Domestic consumer-packaging demand was expected to grow at double-digit rates in 2005 and over a three-year horizon; capacity added in 2004 was expected to be reasonably utilized by end-2005.