The Bombay Burmah Trading Corporation (501425) Q4 02/03 earnings summary

Executive summary

• FY ended 31 Mar 2003 returned to profit: PBT Rs 229.55 lakh vs loss of Rs 1,279.14 lakh in the prior 18-month period; periods are not comparable.

• Gross profit before depreciation was Rs 632.87 lakh vs a loss of Rs 612.33 lakh; PAT was Rs 219.56 lakh and a 10% dividend (Rs 1/share) was recommended.

• Results improved through higher-value marketing, exports, outsourcing, cost reduction, operating efficiencies and a favourable tea crop, despite continued weakness in tea and coffee prices.

Financial highlights

• Gross income was Rs 13,530.07 lakh vs Rs 17,521.11 lakh in the prior 18-month period; net sales were Rs 11,507.05 lakh vs Rs 14,667.23 lakh.

• Basic and diluted EPS was Rs 1.54 vs a loss of Rs 8.72 in the prior 18-month period; weighted average shares were 1,39,54,380.

• Consolidated net sales were Rs 16,744.44 lakh; consolidated PAT after minority interest was Rs 255.39 lakh and EPS was Rs 1.83.

Outlook and guidance

• Tea plans for FY 2003-04 included added non-reconditioned tea capacity, a stronger product mix and more direct sales to consuming centres to improve realisation.

• Speciality tea exports were expected to grow; pricing remained exposed to Iraq-related uncertainty, the stronger rupee and currency movements in other tea-producing countries.

• Spring operations planned a new Aurangabad plant and expansion into two-wheeler suspension springs, targeting market share growth from below 1% to 8%.

• Coffee prices were expected to rise no more than 10%-12% from stated current levels; the outlook depended heavily on Brazil’s 2003/04 crop.