Maharashtra Scooters (MAHSCOOTER) Q4 05/06 earnings summary

Executive summary

• FY06 sales volume and net sales declined amid sustained pressure on geared-scooter demand; scooter production ended in March 2006, with geared-scooter production ceasing from April.

• Net profit was Rs153.7m, including a Rs13.0m prior-year tax credit; proposed dividend rose to Rs4.50 per share from Rs2.50.

• Future direction remained uncertain as alternatives were considered; the existing workforce was retained pending decisions.

Financial highlights

• Net sales and other income totaled Rs422.8m, down from Rs464.0m; net sales fell to Rs201.8m from Rs273.4m, while other income rose to Rs221.0m from Rs190.6m.

• Gross profit before interest and depreciation increased to Rs142.1m from Rs106.4m; profit before tax was Rs131.0m versus Rs94.4m.

• Profit for the year was Rs140.7m before Rs13.0m of prior-year tax credits; net profit after that credit was Rs153.7m, versus Rs79.1m in FY05 after a deferred-tax asset write-down.

• Scooter sales fell to 9,756 units from 13,503; production was 12,000 units versus 12,200.

Outlook and guidance

• Outlook was described as uncertain and difficult to predict; different alternatives were under consideration following the end of geared-scooter production.

• Existing staff were to be retained pending decisions on available alternatives; 2,402 finished scooters remained at year-end for sale in following months.