Timken India (522113) Q4 2008 earnings summary

Executive summary

• FY08 sales and profit grew strongly, led by exports and favorable currency effects, but demand and exports weakened from August as the global downturn spread. source

• Priorities for 2009: conserve cash, tighten inventory and receivables, control costs, and protect customer service while seeking growth in industrial products and services.

Financial highlights

• FY08 net sales were Rs 42,743 lakh, up 23% YoY; total expenditure was Rs 33,842 lakh versus Rs 28,142 lakh.

• PBT rose 39% to Rs 7,792 lakh; PAT increased to Rs 5,300 lakh from Rs 3,740 lakh; EPS was Rs 8.32 versus Rs 5.87.

• Reported EBIT was Rs 7,855 lakh versus Rs 5,657 lakh; interest expense was Rs 106 lakh and depreciation Rs 1,046 lakh.

• Other income rose to Rs 2,294 lakh, including foreign-exchange gains of Rs 443 lakh, export incentives of Rs 516 lakh, investment dividends of Rs 560 lakh, and investment-sale gains of Rs 365 lakh.

Outlook and guidance

• 2009 was expected to be challenging, with heavy truck, steel, cement, off-highway equipment, and tractor markets affected by weak domestic demand and falling export opportunities.

• Management emphasized cash conservation, demand-led inventory, close receivables management, cost control, and maintaining customer service; no numerical guidance was stated.

• Project O.N.E., a new ERP system, was targeted for implementation by April 2009 to improve real-time demand, inventory, and supply tracking.