Ratnamani Metals & Tubes (520111) Q4 97/98 earnings summary

Executive summary

• REL and RFTPL legally merged effective 1 Apr 1995; the High Court approved the scheme on 21 Sep 1998 and the order was filed on 15 Oct 1998. FY98 figures include both businesses and are not comparable with FY97.

• Revenue and net profit rose on the combined basis, while demand remained stagnant and competitive supply pressured margins.

Financial highlights

• Sales and other income were Rs. 6,751.18 lakh vs Rs. 4,841.19 lakh in FY97; comparison is affected by the merger.

• Net profit was Rs. 332.54 lakh vs Rs. 245.79 lakh; PBT was Rs. 378.78 lakh vs Rs. 285.79 lakh.

• PAT included Rs. 10.41 lakh of excess provision written back; prior-year balance brought forward and RFTPL balance added Rs. 90.71 lakh to appropriation funds.

• Dividend of Rs. 1 per share was recommended; total payout, including prior-year distributions to erstwhile REL and RFTPL shareholders, was Rs. 151.71 lakh, or 45.62% of net profit.

Outlook and guidance

• Management expected no perceptible macro-level improvement in demand, but saw no signs of further deterioration in current-year prospects.

• Target was to maintain FY97-98 turnover through quality, delivery and competitive pricing; merger scale benefits were expected to improve production and marketing efficiency.