Vinati Organics (524200) Q4 02/03 earnings summary

Executive summary

• FY03 sales and other income were Rs.3,492.20 lakh, nearly level YoY, while net profit fell to Rs.95.49 lakh from Rs.449.54 lakh amid low IBB realizations, higher raw-material prices and ATBS market-entry delays.

• Commercial production of ATBS began in Oct 2002; quality and operating issues were resolved with the technology supplier, and exports commenced.

Financial highlights

• Sales were Rs.3,394.25 lakh vs Rs.3,406.08 lakh YoY; sales and other income totaled Rs.3,492.20 lakh vs Rs.3,482.33 lakh.

• Profit before depreciation, non-cash charges and taxes was Rs.302.39 lakh vs Rs.711.49 lakh; PBT was Rs.161.27 lakh vs Rs.581.91 lakh.

• Net profit was Rs.95.49 lakh vs Rs.449.54 lakh; EPS was Rs.1.45 vs Rs.6.83.

• Other income included bad-debt recoveries of Rs.29.00 lakh vs Rs.10.00 lakh in FY02.

Outlook and guidance

• Q1 FY04 sales were Rs.727.07 lakh; operating conditions remained difficult and ATBS market acceptance was delayed.

• ATBS quality was established with major acrylic-fibre manufacturers and regular supplies began; export volumes and water-soluble polymer applications were targeted for growth.

• Management expected demand pickup and aimed to build ATBS/SMAS volumes through product quality, technology development and cost competitiveness.