Thermax (THERMAX) Q4 97/98 earnings summary

Executive summary

• FY97-98 performance was considered good by industry standards but below internal estimates, amid sluggish demand and pressure on capital-goods markets.

• Total income increased 1.5% YoY to Rs 5,301 million; net profit rose 4% to Rs 453 million.

• Tighter operating controls, lower costs and stronger exports supported results; exports were 17.9% of turnover versus 15.6% in FY96-97.

Financial highlights

• Revenue was Rs 5,301 million versus Rs 5,224 million; profit before tax was Rs 563 million versus Rs 541 million.

• Profit after tax was Rs 453 million versus Rs 436 million; provision for taxation rose to Rs 110 million from Rs 105 million.

• Profit before interest, depreciation and tax was Rs 718 million versus Rs 715 million.

• Domestic sales fell to Rs 4,024 million from Rs 4,199 million, while exports increased to Rs 857 million from Rs 570 million.

• Cash and bank balances reached Rs 210 million versus Rs 137 million; net cash from operating activities was Rs 461 million versus Rs 585 million.

Outlook and guidance

• Demand for chillers and boilers fell short of expectations; several captive-power and cogeneration projects were under negotiation, with a few targeted for finalisation in the coming months.

• Growth opportunities identified in energy conservation, water recycling, operation and maintenance services, and commercial-sector cooling and water products.

• Acquisitions in India and abroad and strategic alliances in energy were being explored; future R&D was directed toward resource recycling and new technologies.