Rain Industries (RAIN) Q4 01/02 earnings summary

Executive summary

• FY02 revenue reached ₹290.86 crore, while the year ended with a ₹25.62 crore loss before tax and a ₹12.04 crore loss after tax.

• Operational loss was ₹14.62 crore after excluding ₹8.13 crore of sales-tax deferment reversal and ₹2.87 crore of current-year sales tax not treated as deferred.

• Cement sales volume rose by 77,374 tonnes; market share was maintained despite weak pricing and new regional capacity.

Financial highlights

• Sales were ₹290.86 crore vs ₹269.38 crore in FY01; other income increased to ₹3.58 crore from ₹1.23 crore.

• Loss before tax was ₹25.62 crore vs prior-year profit before tax of ₹2.86 crore; loss after tax was ₹12.04 crore vs prior-year profit after tax of ₹2.61 crore.

• Interest and financial charges were ₹31.20 crore vs ₹33.99 crore; depreciation was ₹9.99 crore, broadly level with ₹10.00 crore in FY01.

• Cement sales were 11,38,661 tonnes vs 10,61,287 tonnes; cement production was 11,28,787 tonnes vs 10,60,124 tonnes.

Outlook and guidance

• Management expected sales volumes to improve in FY03, citing stronger demand, infrastructure activity in Andhra Pradesh and market reach in Karnataka, Tamil Nadu and Pondicherry.

• The Prime Minister’s rural roads program, Golden Quadrilateral and broader infrastructure development were seen as potential drivers of cement demand.

• Priorities included cost reduction, product quality, expense discipline and product-mix changes to improve realizations; a return to profitability was an expectation, not quantified guidance.