Huhtamaki India (509820) Q4 97/98 earnings summary

Executive summary

• FY 1997-98 net sales rose 12.3% to Rs 1,672.4m, but profit after tax fell 29% to Rs 62.2m as price pressure, higher depreciation and financing costs weighed on earnings.

• Sales volume grew strongly and market position strengthened; the outlook anticipated higher sales growth and a moderate improvement in profitability, subject to rising input costs and margin pressure.

Financial highlights

• Gross sales increased to Rs 2,083.7m from Rs 1,875.4m; net sales reached Rs 1,672.4m from Rs 1,489.1m, up 12.3% YoY.

• PBDIT was Rs 272.0m versus Rs 276.8m; PBT fell 40.8% to Rs 69.5m and PAT declined 29% to Rs 62.2m.

• EPS fell to Rs 10.12 from Rs 14.24; cash EPS edged up to Rs 25.82 from Rs 25.06. Proposed dividend remained Rs 3/share, or 30%.

• Other income rose to Rs 17.7m from Rs 12.2m, mainly from asset-sale gains and foreign-exchange gains.

Outlook and guidance

• First two months of FY 1998-99 sales revenue was up 20% YoY; higher sales growth was expected for the year as demand improved.

• Profitability was expected to improve moderately, reaching an absolute level above prior years, despite pressure on domestic flexible-packaging margins.

• Routine maintenance and capital spending of Rs 100m was planned for FY 1998-99, funded entirely from internal accruals; larger investments for FY 1999-2000 remained under planning.