The Supreme Industries (SUPREMEIND) Q4 00/01 earnings summary

Executive summary

• FY ended 30 Jun 2001 revenue was Rs 537.77 crore vs Rs 565.72 crore; processed volume rose to 68,413 tonnes from 67,262 tonnes.

• Profit after tax fell to Rs 2.76 crore from Rs 15.56 crore; results included a Rs 1.14 crore extraordinary provision for an unrecovered asset disposal shortfall.

• Difficult trading conditions, compressed margins and accelerated investment in five new manufacturing units weighed on earnings and increased borrowings.

Financial highlights

• Sales were Rs 534.88 crore vs Rs 560.96 crore; total income was Rs 537.77 crore vs Rs 565.72 crore.

• PBT before extraordinary items was Rs 4.37 crore vs Rs 16.73 crore; after a Rs 1.14 crore extraordinary item and Rs 46.5 lakh tax, PAT was Rs 2.76 crore.

• Operating profit, as defined in the performance table, was Rs 71.84 crore vs Rs 80.32 crore; interest expense increased to Rs 41.77 crore from Rs 38.05 crore.

• Exports were Rs 17.81 crore vs Rs 18.94 crore; polymer trading turnover declined to Rs 5.90 crore from Rs 19.59 crore.

Outlook and guidance

• Current-year capital expenditure was expected below Rs 8 crore; asset disposals were expected to generate ~Rs 5 crore and borrowings were targeted to fall by ~Rs 50 crore.

• Debt/equity was targeted at 1:1 within 30 months; optionally convertible debentures were under consideration to reach the target sooner.

• FY 2001-02 turnover for the merged business was projected at ~Rs 730 crore; the merged operation was expected to process ~92,000 tonnes of polymers.

• PVC piping outlook was described as good; broader VAT adoption and lower sales-tax rates were expected to support market penetration, subject to implementation.

• Furniture growth was expected to improve with new units at full capacity; flexible packaging operations were expected to improve as demand recovered.