Voltas (VOLTAS) Q4 02/03 earnings summary

Executive summary

• FY 2002-03 returned to stronger profitability: standalone PBT rose to Rs.2,905 lakh from Rs.1,671 lakh; PAT was Rs.2,558 lakh vs Rs.1,683 lakh.

• Directors recommended a 25% dividend, up from 18% in FY 2001-02.

• Growth reflected stronger performance in most businesses, cost reductions and improved overseas electro-mechanical project contributions.

Financial highlights

• Standalone sales and services were Rs.123,041 lakh vs Rs.94,066 lakh; operating profit before extraordinary items rose to Rs.2,406 lakh from Rs.1,817 lakh.

• Standalone extraordinary income was Rs.499 lakh vs an expense of Rs.146 lakh; PBT was Rs.2,905 lakh and PAT Rs.2,558 lakh.

• Consolidated sales and services were Rs.134,212 lakh; consolidated PBT was Rs.3,390 lakh and PAT after minority interest and associates Rs.2,945 lakh.

• Operating cash flow was Rs.1,993 lakh, compared with cash used of Rs.1,091 lakh in FY 2001-02; prior-year figures are not fully comparable after amalgamations.

Outlook and guidance

• HVACR outlook was positive, led by service-sector demand for large air-conditioning systems and signs of revival in selected industrial sectors.

• Infrastructure budgets and overseas project opportunities could support construction and mining equipment and electro-mechanical contracts, subject to funding, contract wins and execution capability.

• Household and commercial air-conditioning markets offered growth potential; capturing it depended on competing effectively and lowering unit costs.

• The new financial year outlook for Machine Tools and Textile Machinery was optimistic following manufacturing and textile-sector recovery.