Relaxo Footwears (RELAXO) Q4 00/01 earnings summary

Executive summary

• FY2000-01 revenue was Rs 14,052.36 lacs; reported profit after tax fell 13.06% YoY to Rs 685.83 lacs, primarily due to the Bahadurgarh Unit II fire and related production interruption.

• Unit II production resumed in February 2001 after reconstruction and equipment repairs; the new Bhiwadi Hawai plant began commercial production in July 2001.

Financial highlights

• Total income rose to Rs 14,052.36 lacs from Rs 12,518.08 lacs; sales reached Rs 14,009.37 lacs versus Rs 12,424.08 lacs, with reported turnover growth of 12.75%.

• Profit before depreciation and tax was Rs 1,056.06 lacs versus Rs 1,106.75 lacs; profit before tax, after Rs 49.02 lacs extraordinary fire loss, was Rs 860.83 lacs.

• Profit after tax was Rs 685.83 lacs versus Rs 788.86 lacs; tax provision was Rs 175 lacs versus Rs 205 lacs.

• Cost of goods sold increased to Rs 10,720.91 lacs from Rs 9,678.97 lacs; personnel expenses rose to Rs 546.39 lacs from Rs 445.14 lacs.

• Proposed dividend was 15% on equity shares; dividend and dividend tax together required Rs 99.19 lacs.

Outlook and guidance

• Unit II’s February 2001 restart was expected to support profitability in FY2001-02.

• Bhiwadi’s new Hawai manufacturing plant had capacity of 100,000 pairs per day; its FY2001-02 bottom-line contribution was expected to be partial, with full impact in FY2002-03.

• Continuing R&D focus on new products and process development was expected to deliver future benefits.