Trident (TRIDENT) Q4 05/06 earnings summary

Executive summary

• FY06 net sales rose 32% on an annualised basis to Rs 7,436.4 million; PAT increased 67% to Rs 568.2 million despite the prior period covering 15 months.

• Modernisation and capacity additions supported higher margins and exports; export sales reached 56% of net sales, up from 47%.

• Strategic ambition: reach US$1 billion revenue by 2010 through expansion, modernisation and workforce development.

Financial highlights

• Gross turnover was Rs 8,884.9 million; net sales Rs 7,436.4 million; operating profit (PBIDT) Rs 1,588.2 million; PAT Rs 568.2 million.

• Annualised growth: net sales 32%, PBIDT 36%, PAT 67% and cash profit 29% to Rs 1,232.2 million.

• Export sales rose 59% on an annualised basis to Rs 4,189.7 million; exports were 56% of net sales.

• Adjusted context: a one-time Rs 57 million loss was incurred on disposal of non-performing assets.

Outlook and guidance

• Yarn expansion of 46,080 spindles was expected to be fully commissioned in Q2 FY07; paper expansion and related facilities were scheduled for commercial operations in Q3 FY08.

• Paper capacity was planned to rise from 40,500 to 135,000 tonnes per year, supported by a 275 tpd paper machine, 225 tpd pulp mill and 20 MW captive power plant.

• A Rs 2,130 million textile programme would expand terry towel capacity and modernise and balance yarn and towel facilities.

• Management targeted US$1 billion revenue by 2010, with investment in modernisation, capacity and human capital.