Rain Industries (RAIN) Q4 99/00 earnings summary

Executive summary

• FY2000 sales reached ₹222.56 crore, but the year ended with a net loss of ₹8.80 crore, mainly due to higher interest and finance charges and weak realizations.

• Production and sales volumes increased following the merger of Nagarjuna Construction Co. Ltd.’s cement division, while acquisition-related borrowing and operating bottlenecks pressured profitability.

Financial highlights

• Sales were ₹222.56 crore vs ₹165.17 crore in FY1999; other income was ₹2.09 crore vs ₹0.95 crore.

• Loss before tax was ₹8.89 crore vs profit before tax of ₹10.04 crore; net loss was ₹8.80 crore vs net profit of ₹6.44 crore.

• Interest and finance charges rose to ₹27.58 crore from ₹4.62 crore; depreciation increased to ₹9.48 crore from ₹3.78 crore.

• No dividend was recommended for FY2000 due to the loss; the prior-year accounts included a proposed dividend of ₹2.21 crore and dividend tax of ₹0.24 crore.

Outlook and guidance

• Management expected cement-industry growth of 12%, with Andhra Pradesh forecast to be the largest consumption market, supporting performance in FY2001.

• Cost-reduction priorities included logistics, power and fuel; infrastructure improvements at Unit II were intended to reduce cement production costs.

• The Miyapur ready-mix concrete plant was expected to begin operations within a couple of months of the report; its machinery had arrived at the site.