Timken India (522113) Q4 2003 earnings summary

Executive summary

• 2003 net product sales were Rs 216.80 crore; production rose 17% and exports rose 43% YoY, supported by better capacity utilization and lower operating and administrative costs.

• PBT rose 106% on an annualized comparison; strong cash generation supported redemption of Rs 26 crore of preference shares and repayment of long-term borrowings.

• The year ended Dec. 31, 2003 covers 12 months versus nine months for 2002, limiting direct comparison.

Financial highlights

• Net product sales were Rs 216.80 crore for 2003 versus Rs 150.19 crore for the nine months ended Dec. 31, 2002; the stated annualized increase was ~16%.

• EBIT was Rs 34.03 crore vs. Rs 20.40 crore; PBT Rs 33.08 crore vs. Rs 19.26 crore; PAT Rs 23.14 crore vs. Rs 12.43 crore, with 2002 covering nine months.

• EPS was Rs 3.14 vs. Rs 1.67; 2003 preference dividend was Rs 3.15 crore, and 2002's was Rs 1.76 crore.

• No equity dividend was recommended after preference capital redemption and dividend payment; the 9% preference dividend was paid through Dec. 29, 2003.

Outlook and guidance

• 2004 outlook called for a continued strong domestic market and further export opportunities through international markets served by the wider Timken network.

• Raw material costs were forecast to rise further in 2004, adding pressure to margins; labor and raw material cost increases had offset lower fixed costs in 2003.

• Output could not rise further without investment; machinery installed in 1989 required replacement, with important investments expected in 2004 and beyond.