Timex Group India (500414) Q4 02/03 earnings summary

Executive summary

• FY03 revenue grew 22% YoY despite sluggish consumer demand; the net loss narrowed to Rs 236.78m from Rs 251.18m.

• Accumulated losses reached Rs 1,277.68m by 30 June 2003, eroding 89% of net worth; a SICA reference to BIFR was required.

• A capital restructuring plan proposed writing off accumulated losses through reductions in paid-up equity and preference capital and use of share premium, subject to High Court confirmation.

Financial highlights

• FY03 total income was Rs 676.64m vs Rs 551.30m in FY02; net sales were Rs 646.37m vs Rs 524.02m.

• FY03 loss after tax was Rs 236.78m vs Rs 251.18m; EPS was -Rs 2.35 vs -Rs 3.39.

• FY03 expenditure was Rs 913.43m, including materials cost of Rs 404.95m, other expenses of Rs 280.35m, depreciation of Rs 79.23m and interest of Rs 47.49m.

• Gross sales, including excise duty, rose to Rs 755.59m from Rs 614.52m; operating losses declined to Rs 236.8m from Rs 251.2m.

Outlook and guidance

• Management expected aggressive new-product launches, sustained media support and international product access to support market-share gains and profitability.

• Improved retail growth was expected in the forthcoming festival season, supported by a good monsoon; no numerical earnings guidance was stated.

• Cost reduction, working-capital improvement and higher-margin product launches were cited as measures already beginning to yield results.