Linde India (523457) Q4 97/98 earnings summary

Executive summary

• FY ended 30 Sep 1998 sales reached Rs 2,365.6m; loss before tax and extraordinary items was Rs 26.8m, while Rs 88.2m gain from the Healthcare business sale lifted post-tax profit to Rs 61.4m.

• Industrial slowdown, lower demand and price pressure weighed on results; restructuring, cost control and newer markets are central to recovery plans.

Financial highlights

• Sales were Rs 2,365.6m versus Rs 2,329.3m in 1997; profit before depreciation, interest, tax and extraordinary item was Rs 207.1m versus Rs 319.0m.

• Loss before tax and extraordinary item was Rs 26.8m; adjusted for the Rs 88.2m extraordinary gain, profit before tax and post-tax profit were each Rs 61.4m.

• Depreciation was Rs 132.2m; interest was Rs 101.7m. No dividend was recommended for FY1998.

• Net cash from operating activities was negative Rs 206.2m; investing activities used Rs 679.2m and financing activities generated Rs 580.5m.

Outlook and guidance

• Immediate short-term outlook was weak in established markets; petroleum, refinery IGCC technology, hydrogen, medical gases and special gases were identified as growth opportunities.

• Restructuring and revitalisation measures were expected to take a couple of years before an aggressive growth path; the Jamshedpur plant also needs time to build production and returns.

• Growth plans include stronger sales and marketing, improved asset utilisation, and cost reductions in transport, raw materials and underperforming operations.