Huhtamaki India (509820) Q4 98/99 earnings summary

Executive summary

• FY1998-99 results rebounded: net sales rose 23.4% YoY, operating profit before depreciation 33%, EBIT 28.5%, and PAT 39%.

• Growth came from flexible packaging and labelling, the Silvassa expansion, exports, and the Hyderabad acquisition; severe industry overcapacity kept pricing under pressure.

Financial highlights

• Gross turnover reached Rs. 2,554.5 million vs Rs. 2,083.7 million; net sales were Rs. 2,063.8 million vs Rs. 1,672.4 million, up 23%.

• PBT rose to Rs. 96.4 million from Rs. 69.5 million; PAT to Rs. 86.5 million from Rs. 62.2 million, after tax provision of Rs. 9.9 million.

• Export CIF sales increased to Rs. 169 million from Rs. 77.4 million; operating cash flow was Rs. 297.5 million vs Rs. 234.6 million.

• Proposed equity dividend increased to 35% from 30%; Rs. 23.7 million, including dividend tax, was provided for payout.

Outlook and guidance

• FY1999-2000 outlook was considered reasonable for sales revenue and bottom-line growth, supported by expected economic recovery, consumer demand, and Van Leer’s 51% shareholding.

• Carton operations were to focus on quality and customer qualification; a Rs. 70 million modernization program, including a six-colour offset printer, was targeted for commercial production by end-August 1999.

• Export growth was expected to continue, though at a moderated pace amid international price pressure and stronger local competition in developing markets.