Thermax (THERMAX) Q4 99/00 earnings summary

Executive summary

• FY00 performance remained weak: revenue declined 1.9% YoY and PAT fell 15.6%; operations recorded a loss, offset in part by significant treasury income.

• A BCG-led strategic review prompted a sharper focus on energy and environment businesses, alongside plans to exit or hive off non-core operations.

Financial highlights

• Total income was Rs 4,981m vs Rs 5,076m in FY99; profit before tax was Rs 486m vs Rs 498m.

• PAT was Rs 323m vs Rs 383m; exceptional expenses totaled Rs 63m, comprising a Rs 48.3m Fuji JV closure loss and Rs 15m business-transfer payment.

• Material costs and personnel costs each rose 3 percentage points as a share of sales, while fixed expenses did not fall in line with lower revenue.

Outlook and guidance

• Management expected recovery as BCG recommendations were implemented; BCG was retained for a further six months to support execution.

• Absorption Cooling planned to launch EcoChill and Cogenie in Europe by Q4 FY01; new products and improved market reach were also planned in Process Heat.

• TEPS expected substantially higher gross billing in FY01 after commissioning its first energy-cost reduction project and starting work at two more sites.