Voltas (VOLTAS) Q4 03/04 earnings summary

Executive summary

• FY 2003-04 marked a strong recovery: standalone profit after tax rose 53% to Rs. 3,903 lakh, while most businesses improved and were EVA positive.

• Growth reflected cost controls, workforce restructuring, technology upgrades, stronger marketing and an economic upturn; some contract manufacturing, Pumps and overseas Electro-mechanical activities faced setbacks.

Financial highlights

• Standalone sales and services, including consignment sales, were Rs. 132,994 lakh vs Rs. 123,041 lakh; profit before tax was Rs. 4,687 lakh vs Rs. 2,905 lakh.

• Standalone profit after tax was Rs. 3,903 lakh vs Rs. 2,558 lakh; net sales after excise were Rs. 127,319 lakh vs Rs. 116,546 lakh.

• Consolidated sales and services reached Rs. 143,752 lakh vs Rs. 134,212 lakh; profit after minority interest and associate results was Rs. 4,029 lakh vs Rs. 2,945 lakh.

• Net exceptional income was Rs. 989 lakh vs Rs. 499 lakh; property and development-rights gains were partly offset by the full VRS charge and other provisions.

Outlook and guidance

• Air-conditioning and refrigeration entered the year with a healthy carry-forward order book; low-temperature refrigeration grew over 50% YoY and was positioned for further growth.

• Overseas Electro-mechanical order book under execution was Rs. 60,000 lakh at 31 March 2004; growth opportunities included Middle East construction and water-treatment projects.

• Domestic air-conditioning project demand was expected to benefit from malls, multiplexes, IT and BPO; industrial and service sectors were expected to grow 7%-8% over the next three years.

• Air-conditioner exports and refrigerator exports were being developed across the Middle East, South and West Africa, Bangladesh and Sri Lanka.