SKF India (500472) Q4 02/03 earnings summary

Executive summary

• 2003 sales rose 14.6% YoY to Rs.4,652.4 million and net profit increased to Rs.322.0 million from Rs.204.2 million; momentum strengthened in H2.

• Market share gains, long-term contracts, productivity improvements and lower financing costs supported performance despite higher steel costs and pricing pressure.

Financial highlights

• Net sales Rs.4,652.4 million vs Rs.4,057.2 million; total revenue, including Rs.239.8 million other income, Rs.4,892.2 million vs Rs.4,198.5 million.

• Profit before interest and tax Rs.555.4 million vs Rs.439.5 million; net interest Rs.49.1 million vs Rs.109.7 million; PBT Rs.506.3 million vs Rs.329.8 million.

• Net income Rs.322.0 million vs Rs.204.2 million; basic EPS Rs.7.11 vs Rs.4.51 and diluted EPS Rs.6.61 vs Rs.4.37.

• Board recommended a 25% equity dividend; proposed dividend Rs.113.2 million, with Rs.125.0 million transferred to general reserve.

Outlook and guidance

• 2004 outlook was positive, supported by expected automobile-sector growth, improving economic indicators and strong macroeconomic fundamentals; no quantified financial guidance was stated.

• Margin pressure was expected to persist due to raw-material cost increases; priorities included cost reduction, productivity, asset utilization and continued growth across segments and new customers.

• Six Sigma was positioned as a core continuous-improvement program; launched in 2003 with 9 Black Belt and 13 Green Belt projects.