Triveni Engineering & Industries (TRIVENI) Q4 02/03 earnings summary

Executive summary

• FY03 gross sales rose 17% to Rs703.5 crore, but low sugar prices and higher cane costs compressed operating profit; PAT fell to Rs4.8 crore from Rs26.9 crore.

• Prior-year PAT included Rs16.2 crore of net non-recurring income, versus Rs0.2 crore in FY03.

Financial highlights

• Operating profit before interest, depreciation, amortisation and tax fell 30% to Rs53.7 crore from Rs77.3 crore; PBT before non-recurring items was Rs7.7 crore versus Rs12.8 crore.

• Net income was Rs4.8 crore; basic EPS was Rs3.91 versus Rs21.86. A 15% equity dividend was recommended, with Rs2.1 crore total outgo including dividend tax.

• Sales and other income rose 17% to Rs703.5 crore; net financing charges declined 37% to Rs31.2 crore, a reduction of Rs18.7 crore YoY.

• Operating cash flow was Rs107.8 crore versus Rs49.1 crore; cash flow used in financing was Rs102.2 crore, including net debt repayments and interest paid.

Outlook and guidance

• Sugar prices were expected to remain under pressure as record production and closing stocks offset higher exports; regulated monthly releases were expected to support realizations in H2 FY04.

• Sugarcane area at the mills was expected to remain broadly flat in FY04; cane yields and recoveries depend on rainfall, while cane development work targets improved yields and recovery.

• Turbine exports were expected to increase substantially over the next two years; management also anticipated potential demand from new small- and medium-sized independent power plants.

• Gear sales growth was targeted over the next 3–4 years; licensed product expansion and equipment upgrades were planned, with substantial capex expected over the next two years.