Timex Group India (500414) Q4 98/99 earnings summary

Executive summary

• FY1998-99 was a transition year after sales, marketing and service responsibilities shifted to a standalone distribution network; sales volume fell 10% YoY and the year ended in a net loss of Rs.1,750.72 lakh.

• A new dealer and service network, exclusive showrooms, cost controls and product development were positioned to support future growth amid intense competition.

Financial highlights

• Total income was Rs.6,825.77 lakh vs Rs.7,407.73 lakh; sales were Rs.6,652.14 lakh vs Rs.7,304.03 lakh.

• Operating and other expenses rose to Rs.7,034.19 lakh from Rs.6,229.04 lakh; gross loss was Rs.208.42 lakh vs gross profit of Rs.1,178.69 lakh.

• Net loss was Rs.1,750.72 lakh vs Rs.155.45 lakh; interest expense, net, increased to Rs.1,021.26 lakh from Rs.856.61 lakh.

• Export earnings were Rs.324.45 lakh vs Rs.123.45 lakh; investment-sale loss and diminution provision were Rs.67.05 lakh and Rs.178.13 lakh, respectively.

Outlook and guidance

• Brand-building and advertising, dealer development, new product introductions and after-sales service were to remain central to volume and market-share growth.

• Up to 40 exclusive showrooms were expected by the end of the current fiscal year, compared with 18 then operating.

• Interest costs were expected to return to more normal levels; first-quarter borrowings were reduced by Rs.600 lakh vs 31 March 1999, with debt-equity improvement a stated priority.

• Further case-plant utilization gains and large export orders were expected; export development was focused on the U.S., Europe, Bangladesh and Sri Lanka.