SKF India (500472) Q4 98/99 earnings summary

Executive summary

• Nine-month results turned profitable after restructuring and rationalisation; a 55-day strike at the Bangalore factory reduced performance and caused lost business, including exports.

• Pune 2000 factory upgrade was nearing completion, improving product quality, productivity and profits, and adding Hub Bearing and Taper Roller Bearing manufacturing channels.

Financial highlights

• Net sales were Rs 273.95 crore and net profit Rs 9.82 crore for the nine months ended Dec. 31, 1999; the nine-month period is not comparable with the prior full year.

• Profit before extraordinary items and tax was Rs 10.44 crore; prior-year results included Rs 56.93 crore of voluntary retirement scheme expenditure and a Rs 44.27 crore net loss.

• Domestic sales rose 8.1% YoY for the corresponding period; aftermarket price increases were implemented instead of reducing product prices.

Outlook and guidance

• 2000 priorities: profitable rather than volume growth, improved customer service, expanded sales and application engineering resources, and new OEM and aftermarket products and services.

• Pune 2000 was expected to be completed during 2000, with benefits continuing through the year; asset utilisation improvements were also planned.

• Overall market conditions were expected to remain mainly positive, while lower import duties were expected to intensify competition.