Ramkrishna Forgings (RKFORGE) Q4 08/09 earnings summary

Executive summary

• FY08-09 net revenue rose 14.09% YoY to Rs 229.00 crore, while EBITDA fell 9.05% to Rs 36.08 crore and PAT declined 65.13% to Rs 4.54 crore, largely on higher finance costs.

• Commercial-vehicle weakness reduced forging output to 17,027 tonnes from 22,810 tonnes; production of the ring-rolling facility was stabilised and machining capacity expanded.

• No dividend was declared for FY08-09, with directors citing the slowdown and lower profits.

Financial highlights

• Sales and operating income increased to Rs 253.69 crore from Rs 228.66 crore; net sales and operating revenue after excise reached Rs 229.00 crore versus Rs 200.72 crore.

• PBT fell to Rs 7.37 crore from Rs 20.26 crore; PAT was Rs 4.54 crore versus Rs 13.02 crore.

• Interest and finance charges rose to Rs 17.75 crore from Rs 9.78 crore; depreciation increased to Rs 10.96 crore from Rs 9.63 crore.

• Exports increased 5.50% to Rs 20.37 crore from Rs 19.30 crore.

Outlook and guidance

• Management expected industry recovery during FY09-10, citing government stimulus measures and stronger demand in the final quarter of FY08-09.

• Long-term outlook highlighted export outsourcing, automotive component growth and planned railway procurement of 18,000 wagons, compared with 11,000 in FY08-09.

• No numeric financial forecast was stated; actual results could differ materially from forward-looking expectations.