Voltas (VOLTAS) Q4 00/01 earnings summary

Executive summary

• FY2000-01 profit after tax was Rs.55.8m versus Rs.55.0m; profit before tax was Rs.57.2m versus Rs.59.6m, after extraordinary expenses of Rs.114.66m.

• Sales and services, excluding consignment sales, were Rs.8,537.2m versus Rs.7,863.9m; highlights including consignment sales showed Rs.12,346.3m versus Rs.11,184.3m.

• Performance was mixed: air-conditioning, turnkey pumping projects and several consumer cooling businesses advanced, while chemicals and machine tools faced headwinds.

Financial highlights

• Profit before financial items, depreciation and extraordinary items was Rs.396.34m versus Rs.434.58m; financial items were Rs.76.52m versus Rs.215.40m.

• Depreciation was Rs.147.92m versus Rs.150.15m; extraordinary expenses were Rs.114.66m versus Rs.9.48m, leaving profit before tax of Rs.57.24m versus Rs.59.55m.

• Profit after tax was Rs.55.80m versus Rs.54.95m; EPS was Rs.1.7 in both years.

• Operating, administration and other expenses were Rs.1,864.1m versus Rs.1,934.9m; staff expenses were Rs.1,003.0m versus Rs.1,093.9m.

• Net current assets declined to Rs.596.2m from Rs.814.0m; borrowings were Rs.1,344.7m versus Rs.1,418.7m.

Outlook and guidance

• Air-conditioning and refrigeration carried a healthy order book, supporting expectations of continued improved performance.

• Mining and construction equipment had a broader road-building portfolio and was positioned for accelerated growth over the next 3–5 years.

• Chemicals outlook for FY2001-02 was fair; lower prices and longer credit terms from principals were expected to support sales and margins, with new products targeted for the second half.

• The outlook for the Indian economy was uncertain, especially in engineering and capital goods; strategy emphasized technology, services, cost reduction and productivity.

• VIL expected opportunities in India as international consultants and contractors expanded locally; a proposed merger with the parent business was subject to approvals.