Voltas (VOLTAS) Q4 05/06 earnings summary

Executive summary

• FY06 sales and services reached Rs 190,418 lakh, up 32%; net profit rose 40% to Rs 7,049 lakh despite a Rs 6,508 lakh Hyderabad VRS charge.

• Continuing businesses improved across the board; operating profit before exceptional items and tax rose 124% to Rs 11,788 lakh.

• Consolidated net profit after minority interest and associate results was Rs 7,365 lakh; consolidated EPS was Rs 22.26.

Financial highlights

• Standalone net sales and services, after excise duty, were Rs 185,314 lakh vs Rs 138,666 lakh; other income was Rs 2,431 lakh.

• PBT was Rs 9,169 lakh vs Rs 5,766 lakh; PAT was Rs 7,049 lakh vs Rs 5,041 lakh.

• Exceptional items were a net charge of Rs 2,619 lakh, including VRS costs of Rs 6,508 lakh, offset partly by impairment reversal of Rs 2,774 lakh and other credits.

• Revenue from international projects and services supported growth; foreign projects profit was Rs 5,651 lakh vs Rs 3,874 lakh.

Outlook and guidance

• International electro-mechanical projects began FY07 with a carry-forward order book above Rs 1,300 crore, with further growth expected from submitted bids and active negotiations.

• Household and commercial air-conditioning demand was expected to sustain 25% growth over the next three years.

• Pantnagar manufacturing facilities for central AC and commercial refrigeration were expected to begin commissioning or production in H1 FY07.

• Growth opportunities cited included Gulf construction, domestic infrastructure, cold storage, textiles, logistics and warehousing equipment.