Voltas (VOLTAS) Q4 01/02 earnings summary

Executive summary

• FY2001-02 profit after tax rose to Rs.168.336m from Rs.55.801m; results included substantial asset-sale gains and a Rs.307.795m VRS charge. Borrowings fell and the recommended dividend increased to 18%.

• Restructuring focused on exiting non-core activities, right-sizing staffing, cutting costs and working capital, and integrating Voltas International’s project business.

Financial highlights

• Sales and services were Rs.9,406.620m vs Rs.8,537.166m; other income was Rs.124.336m vs Rs.121.078m.

• Profit before extraordinary items and tax was Rs.181.718m vs Rs.171.898m; PBT was Rs.167.115m vs Rs.57.238m.

• PAT was Rs.168.336m vs Rs.55.801m; basic and diluted EPS were both Rs.5.09 vs Rs.1.69.

• Extraordinary items were a net expense of Rs.14.603m vs Rs.114.660m; FY02 included Rs.196.721m undertaking-sale profit and Rs.368.587m property-related profit, offset by Rs.307.795m VRS amortisation.

• The recommended equity dividend was 18% vs 12%; proposed dividend totaled Rs.59.559m.

Outlook and guidance

• Electro-mechanical projects had an order book above Rs.6,000m, with improved turnover and profit contribution expected in coming years.

• Central air conditioning and unitary products were positioned for growth as industrial activity recovers and service-sector demand expands; room air conditioners offered growth potential given low market penetration.

• Growth initiatives targeted infrastructure, overseas electro-mechanical contracts and exports of air conditioners, water coolers, forklifts and pumps.