Usha Martin (517146) Q4 98/99 earnings summary

Executive summary

• Nine-month results to 31 Dec 1999: sales and other income Rs 642.82 cr; profit after tax Rs 33.10 cr. The period is not directly comparable with the prior 12 months due to a change in accounting year.

• Strategic focus shifted from commodity manufacturing toward higher-value products, integrated steel and wire-rope operations, and customer solutions.

Financial highlights

• Sales were Rs 631.42 cr and other income Rs 11.40 cr; profit before tax was Rs 33.10 cr for the nine months ended 31 Dec 1999.

• Profit after tax was Rs 33.10 cr versus Rs 42.62 cr for FY 1998-99; the periods cover nine and 12 months, respectively, and are not strictly comparable.

• Other income included non-recurring gains of Rs 17.73 cr from a spin-off, Rs 4.03 cr from sale of marketing and distribution rights, and Rs 3.56 cr from investment sales.

• Operating cash flow was Rs 50.85 cr; cash used in investing activities was Rs 225.07 cr, including fixed-asset purchases of Rs 138.68 cr.

Outlook and guidance

• FY 2000-01 was set to cover 15 months, with results across five quarters and audited results due by 31 May 2001.

• Management targeted a 16% corporate PBIT return on capital employed and cash flow above Rs 100 cr for the current financial year.

• Steel division targets included Rs 500 cr turnover, Rs 105 cr contribution, 30,000 tonnes of exports, and production growth; SMS capacity expansion was planned to reach 350,000 tpa.

• Planned steel sales targets were Rs 870 cr in 2000-01, Rs 1,200 cr in 2001-02, and Rs 1,500 cr in 2002-03.

• Cable outlook was supported by DoT's 403 LCKM tender and capacity additions; the 20,000 RKM optic-fibre plant at Silvassa was expected to start in Nov 2000.