Rallis India (RALLIS) Q4 03/04 earnings summary

Executive summary

• FY2003-04 net profit was Rs. 25.55 crore versus a Rs. 77.27 crore loss; improvement was mainly driven by gains from selling Ralli House and the gelatine business.

• Loss before exceptional items narrowed to Rs. 53.48 crore from Rs. 56.86 crore; sales fell to Rs. 489.19 crore from Rs. 845.89 crore, with periods not strictly comparable after subsidiary mergers.

• The business refocused on pesticides and agrochemicals, while reducing inventory, receivables, borrowings and operating costs.

Financial highlights

• Sales were Rs. 489.19 crore versus Rs. 845.89 crore; total income was Rs. 521.44 crore versus Rs. 884.54 crore.

• Profit before tax was Rs. 26.19 crore versus an Rs. 80.69 crore loss; exceptional items contributed Rs. 79.67 crore versus a Rs. 23.83 crore charge.

• Net profit was Rs. 25.55 crore versus a Rs. 77.27 crore loss; no dividend was recommended due to accumulated losses.

• Net interest expense was Rs. 39.56 crore versus Rs. 41.52 crore; depreciation was Rs. 17.03 crore versus Rs. 15.22 crore.

Outlook and guidance

• FY2004-05 pesticide-industry sales were expected to improve on forecast normal monsoon, good commodity prices and low pipeline stocks, while earnings faced price and input-cost pressure.

• Growth plans emphasized cotton, paddy and wheat, strategic alliances, farmer-focused promotions, and distinctive products for vegetables and fruits.

• R&D targeted Indian crop-protection molecules likely to go off-patent beyond 2006-07; registrations were being pursued in several export markets.