Huhtamaki India (509820) Q4 96/97 earnings summary

Executive summary

• FY97 gross sales rose 22% to Rs 18,754 lacs and net sales rose 22% to Rs 14,891 lacs; domestic core flexible-packaging sales grew 33% in value terms.

• Profit before tax increased to Rs 1,172 lacs from Rs 1,029 lacs; profit after tax rose to Rs 875 lacs from Rs 679 lacs.

• Silvassa Phase I began commercial production in June 1996, reaching 81% average capacity utilisation in Jan–Mar 1997.

Financial highlights

• Gross sales Rs 18,754 lacs vs Rs 15,427 lacs; net sales Rs 14,891 lacs vs Rs 12,233 lacs in FY96.

• PBT Rs 1,172 lacs vs Rs 1,029 lacs; PAT Rs 875 lacs vs Rs 679 lacs; EPS Rs 14.24 vs Rs 11.05.

• Cash profit increased 41% to Rs 1,539 lacs from Rs 1,091 lacs; net interest expense rose to Rs 931 lacs from Rs 368 lacs.

• Actual net sales and PAT were Rs 14,891 lacs and Rs 875 lacs, below rights-issue projections of Rs 15,139 lacs and Rs 998 lacs.

Outlook and guidance

• Phase II at Silvassa was expected to begin phased commercial production in Q2 FY98; the project review anticipated a July 1997 start.

• Phase III plans included partial production by November 1997; export sales were expected to grow substantially at reasonably remunerative prices.

• Management expected a satisfactory full-year performance on the assumption of an industrial-growth revival; first-half performance remained uncertain.

• Competitiveness priorities included customer service, quality, cost control, productivity and production economies.