Lloyds Metals And Energy (512455) Q4 05/06 earnings summary

Executive summary

• Total income rose 5% to Rs. 29,542.20 lakh in FY06; reported PAT was Rs. 4,205.22 lakh, driven by a large one-time debt-restructuring credit.

• Steel-market weakness and higher raw-material costs pressured operations, while debt restructuring reduced liabilities and servicing costs.

Financial highlights

• Sales were Rs. 29,504.68 lakh versus Rs. 28,116.50 lakh; other income was Rs. 37.52 lakh versus Rs. 44.30 lakh.

• Operating profit before interest, depreciation, exceptional items and tax was Rs. 89.54 lakh, down from Rs. 2,579.60 lakh; PBT before exceptional items was a loss of Rs. 1,995.57 lakh.

• Reported PAT was Rs. 4,205.22 lakh versus Rs. 2,982.54 lakh; net exceptional income of Rs. 6,207.07 lakh primarily reflected interest-provision write-back.

• Auditor’s interest adjustment: including Rs. 2,707.21 lakh of unprovided interest would reduce FY06 PAT to Rs. 1,498.01 lakh; cumulative unprovided interest was Rs. 8,034.06 lakh.

Outlook and guidance

• Sponge iron production was expected to rise substantially in FY07 as recently expanded capacity became operational in phases during FY06.

• Steel-industry outlook depended on global prices, which showed signs of stabilisation after remaining subdued through the prior year.