Mazagon Dock Shipbuilders (MAZDOCK) Q4 17/18 earnings summary

Executive summary

• FY18 value of production (VoP) reached ₹4,399.16 crore, up from ₹3,523.67 crore YoY; PBT fell to ₹696.37 crore from ₹837.00 crore. MoU performance was rated “Very Good.”

• Order book for shipbuilding, submarines and heavy engineering stood at ₹51,442.70 crore as of 30 Jun 2018.

• Delivered INS Kalvari, launched INS Karanj and advanced Project 15B destroyer and Project 17A frigate milestones during FY18.

Financial highlights

• Standalone revenue from operations was ₹4,409.59 crore vs ₹3,530.48 crore YoY; contract revenue/VoP was ₹4,399.16 crore vs ₹3,523.67 crore.

• Standalone PBT was ₹696.37 crore vs ₹837.00 crore; net profit was ₹439.80 crore vs ₹548.99 crore, and total comprehensive income was ₹400.61 crore vs ₹548.11 crore.

• EBITDA was ₹750.43 crore vs ₹880.29 crore; net worth was ₹2,422.40 crore vs ₹2,624.54 crore.

• Revenue from operations increased while materials consumed rose to ₹2,692.88 crore from ₹2,140.08 crore and subcontracting charges to ₹322.69 crore from ₹110.19 crore.

• Operating cash flow was ₹441.62 crore vs a ₹1,009.24 crore outflow; cash and cash equivalents ended at ₹373.56 crore vs ₹142.88 crore.

Outlook and guidance

• Plans include reviving ship-repair operations to diversify revenue, shorten revenue cycles and reduce reliance on MoD orders; export marketing is targeted at Latin America, Africa, South-East Asia, the Middle East and Scandinavia.

• A greenfield Nhava yard is under feasibility study, with ship-lift, wet basin, workshops and repair facilities planned across ~35 acres; a ship-lift design is intended for vessels up to ~240 m.

• A new navigation channel with ~10 m draft was being developed through capital dredging, with completion expected in FY20; submarine launch facilities were also tendered to expand capacity.

• The second submarine assembly line and modernized production facilities are intended to support current timelines and anticipated future orders.