John Cockerill India (500147) Q4 16/17 earnings summary

Executive summary

• FY17 revenue and profitability declined as lower steel prices and weaker-than-expected Indian steel demand weighed on project activity; management reported a more positive order pipeline and anticipated stronger opportunities ahead.

• Operations were reorganized around a “One Industry” team, with Taloja and Hedavali facilities targeted for higher utilization and competitive production.

Financial highlights

• Total revenue was ₹16,787.17 lakh vs ₹21,449.07 lakh in FY16; net revenue from operations was ₹15,380.61 lakh vs ₹20,537.81 lakh.

• Profit before exceptional item and tax was ₹437.40 lakh vs ₹525.28 lakh; FY17 profit after tax was ₹345.49 lakh vs ₹1,312.28 lakh.

• FY16 included a ₹1,433.93 lakh exceptional gain on the Silvassa asset sale; excluding that one-time item, FY16 PBT was ₹525.28 lakh.

• Operating cash flow was ₹5,977.09 lakh vs outflow of ₹962.38 lakh in FY16; cash and cash equivalents ended FY17 at ₹6,224.75 lakh vs ₹126.10 lakh.

Outlook and guidance

• Management expected business sentiment and opportunities in domestic and overseas markets to strengthen, supported by a developing sales pipeline; order entry was expected to improve, without a numeric forecast.

• India’s finished steel output was forecast to rise 5.7% in 2017; the National Steel Policy targets 300 million tonnes of annual capacity by 2025 and per-capita consumption of 160 kg by 2030.