Trident (TRIDENT) Q4 04/05 earnings summary

Executive summary

• 15-month period ended Mar. 31, 2005: net sales Rs 7,056.2m, PBIDT Rs 1,462.2m and PAT Rs 426.0m; prior-year comparisons cover 12 months and are not directly comparable.

• On an annualized basis, net sales rose 22% and PBIT 10%; exports were 47% of sales.

• Profitability faced a weak US dollar, export-incentive realignment and higher deferred-tax provisioning; management cited strong demand and a positive outlook.

Financial highlights

• Net sales Rs 7,056.2m vs Rs 4,638.1m; PBIDT Rs 1,462.2m vs Rs 1,063.9m; prior period was 12 months vs 15 months currently.

• PAT Rs 426.0m vs Rs 358.6m; basic EPS Rs 2.19 vs Rs 1.84, while diluted EPS was Rs 1.80.

• Cash profit was Rs 1,197.2m, up 13% annualized; exports reached Rs 3,300.2m, up 27% annualized.

• Fixed-asset additions were Rs 3,267.4m; gross block rose to Rs 8,218.0m from Rs 4,950.6m.

Outlook and guidance

• More than Rs 10,000m of expansion and modernization investment was planned to build scale, improve competitiveness and support EPS.

• Terry-towel Phase II, adding 60 looms and taking capacity to 29,000 tpa, was targeted for Q3 FY2005-06; 50,784 additional spindles and a 20MW captive power plant were scheduled for June 2006.

• Paper expansion of Rs 6,800m, including a 225-tpd pulp mill, 275-tpd paper machine and 20MW captive plant, was expected to operate in Q1 FY2007-08.

• Management expected to benefit from post-quota textile opportunities, rising paper demand and operating leverage from capacity investments.