RHI Magnesita India (534076) Q4 16/17 earnings summary

Executive summary

• FY17 net sales and income rose 13.65% YoY to Rs. 52,765.05 lakh; profit before tax increased 23.92% to Rs. 10,487.16 lakh.

• Net profit reached Rs. 6,861.81 lakh, with basic and diluted EPS of Rs. 5.71; the board recommended a Rs. 2.50/share dividend, subject to shareholder approval.

• Export sales increased 18.20%; plans call for expanding Bhiwadi ISO capacity to 11,700 tonnes per year to meet anticipated demand growth.

Financial highlights

• Net sales and income were Rs. 52,765.05 lakh versus Rs. 46,426.22 lakh in FY16; reported YoY growth was 13.65%.

• Profit before depreciation, interest and tax was Rs. 11,124.12 lakh; depreciation was Rs. 636.66 lakh and interest expense was Rs. 0.30 lakh.

• Profit before tax was Rs. 10,487.16 lakh versus Rs. 8,465.64 lakh; net profit was Rs. 6,861.81 lakh versus Rs. 5,581.84 lakh.

• Net revenue from operations was Rs. 51,938.77 lakh; other income was Rs. 826.28 lakh, taking total revenue to Rs. 52,765.05 lakh.

• Operating cash flow was Rs. 6,044.96 lakh; cash and cash equivalents at year-end were Rs. 10,642.58 lakh.

Outlook and guidance

• Management expected to sustain growth in FY18, supported by a positive domestic steel outlook and continued support from RHI AG.

• ISO market demand was forecast at 10,000 tonnes in 2018 and 11,700 tonnes from 2019 onward; added capacity was targeted for completion in Q2 2018.

• The Rs. 1,727 lakh ISO expansion project will add a production line at Bhiwadi, increasing capacity from 9,300 to 11,700 tonnes per year.