The Bombay Burmah Trading Corporation (501425) Q4 01/02 earnings summary

Executive summary

• Difficult 18-month period ended 31 Mar 2002; sustained weak tea and coffee prices, adverse weather and labour disruption contributed to a net loss of Rs 1,304.93 lakh.

• No dividend recommended, marking only the third skipped dividend in 139 years.

Financial highlights

• Total income Rs 19,386.44 lakh versus Rs 19,370.33 lakh in the prior 18-month period; sales Rs 16,022.52 lakh versus Rs 18,339.46 lakh.

• Loss before tax Rs 1,279.14 lakh and loss after tax Rs 1,304.93 lakh, compared with Rs 1,611.11 lakh and Rs 1,638.32 lakh, respectively.

• Other income included Rs 1,353.55 lakh profit on sale of fixed assets; reported results also included other prior-year tax provisions/refunds.

• Balance-sheet borrowings rose to Rs 14,081.03 lakh from Rs 10,641.49 lakh; net current assets were Rs 8,535.04 lakh versus Rs 5,523.99 lakh.

Outlook and guidance

• Tea strategy shifted toward direct sales after removal of the Tea Marketing Control Order, with new depots, blended products, export-market development and organic teas targeted.

• Coffee plans focused on specialist buyers, washed and gourmet products, organic coffee and higher output of secondary crops such as pepper.

• Formica India plans productivity gains, wider domestic distribution and special industrial laminate grades for export; BCL Springs targeted complex products, exports and closer design work with customers.

• Herkulu Estate was selected for organic certification; management expected this to support better price realisation.