Pitti Engineering (513519) Q4 02/03 earnings summary

Executive summary

• FY03 returned to profit: net profit Rs121.88 lacs vs loss Rs228.34 lacs in FY02, supported by higher volumes, lower finance charges and an Rs805.47 lacs exceptional interest waiver.

• Sales volume reached a record 3,427 MT, up 35% YoY; sales turnover was Rs2,992.65 lacs, up 27%.

Financial highlights

• Sales and services were Rs2,992.65 lacs vs Rs2,356.93 lacs; other income was Rs54.71 lacs vs Rs17.50 lacs.

• Profit before tax was Rs133.31 lacs vs loss of Rs236.11 lacs; reported net profit was Rs121.88 lacs vs loss of Rs228.34 lacs.

• Finance charges fell to Rs97.34 lacs from Rs362.52 lacs; exceptional interest waivers of Rs805.47 lacs were recorded following OTS agreements.

• Cash profit was Rs396.25 lacs vs cash loss of Rs39.69 lacs, before tools and other write-offs, capitalization of tool-room expenses and depreciation.

Outlook and guidance

• FY04 sales target is 4,000 MT; 672 MT had been sold through May 2003, and management expected significantly higher profit than FY03.

• Export orders were expected in H2 FY04 following advanced negotiations with an overseas manufacturer; export growth remained a focus.

• Management expected to become free of long-term debt by FY-end, with lower interest costs, domestic demand and export focus supporting prospects.