Linde India (523457) Q4 04/05 earnings summary

Executive summary

• FY05 turnover reached a record Rs.4,244 million, up 22% YoY; operating profit before extraordinary items rose 126% to Rs.456 million.

• Growth was led by Project Engineering and stronger gas volumes, pricing and operating efficiency; strategic capacity additions targeted expansion in Southern India.

Financial highlights

• Gross sales were Rs.4,243.59 million versus Rs.3,471.75 million; net sales were Rs.3,847.11 million after excise duty.

• Operating profit after depreciation and interest, before extraordinary items, was Rs.455.90 million versus Rs.201.38 million; PBT was Rs.475.33 million, up 9% YoY.

• PAT was Rs.279.75 million versus Rs.292.92 million; lower property-sale gains and higher current and deferred tax charges offset operating improvement.

• Extraordinary items included Rs.34.87 million property-sale profit and Rs.15.44 million settlement compensation charge; prior-year property-sale profit was Rs.253.24 million.

• EPS was Rs.5.70 versus Rs.5.97; proposed dividend was 15% (Rs.1.50/share), including a special 5% anniversary dividend.

Outlook and guidance

• Bellary’s 855 tpd ASU was expected to be commissioned by mid-2006; Medak’s 65 tpd merchant ASU was scheduled before FY06 year-end.

• Capacity additions in Southern India and compressed-gas site rationalisation were expected to strengthen competitiveness and position operations to capture short- to medium-term market growth.

• Outlook depended on steel and infrastructure investment, execution of growth projects, application development and competitive responses; forward-looking expectations were subject to economic, regulatory and demand risks.