Raymond (RAYMOND) Q4 96/97 earnings summary

Executive summary

• FY ended Mar. 31, 1997: gross turnover rose 9% to Rs. 1,229 crore; profit before tax fell to Rs. 13.9 crore from Rs. 108.5 crore amid higher costs, interest and operational disruption.

• Recommended equity dividend was cut to 10% from 50%; Rs. 18.8 crore was set aside for the Debenture Redemption Reserve.

Financial highlights

• Income net of excise, freight and discounts rose 9% to Rs. 993.4 crore; exports increased 42.1% to Rs. 158.1 crore.

• Gross surplus before interest, depreciation and tax fell to Rs. 163.6 crore from Rs. 216.2 crore; interest rose to Rs. 83.9 crore from Rs. 55.4 crore and depreciation to Rs. 65.8 crore from Rs. 52.3 crore.

• Profit before tax was Rs. 13.9 crore versus Rs. 108.5 crore; net profit after tax was Rs. 12.68 crore versus Rs. 95.98 crore.

• Net sales and other income were Rs. 993.43 crore; net profit margin was 1.3% of value added versus 15.0% in FY96.

Outlook and guidance

• Management launched broad cost reduction efforts and engaged Arthur Andersen & Co. for an operational review; benefits were expected in the near future.

• Raymond Calitri Denim was stabilising operations after its first partial year; performance was expected to improve in FY98.

• The proposed Ansell International condom joint venture was expected to support a turnaround through technical upgrades, stronger market share and exports; court approval remained pending.