Usha Martin (517146) Q4 03/04 earnings summary

Executive summary

• Consolidated net turnover rose to Rs 10,700.5m from Rs 10,376.3m; profit after tax increased to Rs 163.6m from Rs 46.0m. EPS was Rs 4.42 vs Rs 1.01.

• Standalone turnover was Rs 7,970.7m, up from Rs 7,367.2m; profit after tax reached Rs 155.2m vs Rs 82.2m.

• Strategic focus shifted toward integrated steel and wire-rope operations, captive inputs, value-added products, and international manufacturing and distribution.

Financial highlights

• Consolidated PBT was Rs 255.5m vs Rs 96.3m; PAT before minority interest was Rs 163.6m vs Rs 46.0m.

• Standalone PBT rose 74% to Rs 232.7m and PAT rose 89% to Rs 155.2m; sales and other income was Rs 7,970.7m.

• Standalone export turnover on a CIF basis increased 13.5% to Rs 2,267.2m from Rs 1,997.5m.

• Consolidated operating cash flow was Rs 1,795.9m; investing cash outflow was Rs 1,088.7m and financing cash outflow was Rs 819.4m.

• Standalone EPS was Rs 4.19 vs Rs 2.58; proposed dividend was 15% on equity shares, including dividend tax of Rs 35.58m.

Outlook and guidance

• 100,000 MT DRI and 10 MW waste-heat captive-power plants were expected to start in July 2004; iron-ore mining was expected to begin by October 2004.

• Input integration was expected to benefit steel operations from FY05, with benefits reaching optimum levels in FY06.

• Wire and wire-rope operations expected reasonable turnover growth and profitability in FY05 as new value-added facilities ramped up.

• Singapore, Thailand, cable, and UK businesses anticipated improved or sustained performance in FY05; US operations remained exposed to a slow recovery.