Voltas (VOLTAS) Q4 96/97 earnings summary

Executive summary

• FY1996-97 ended in a net loss of Rs. 168.2 million, versus net profit of Rs. 157.0 million in FY1995-96; equity dividend was not recommended, while the 14% preference dividend was provided.

• Sales including consignment sales were Rs. 14,462 million, up Rs. 12 million YoY; recession, weak demand, competitive pricing and higher interest costs weighed on results.

Financial highlights

• Sales and services were Rs. 10,406.1 million versus Rs. 9,828.1 million; other income rose to Rs. 231.0 million from Rs. 144.3 million.

• Loss before tax was Rs. 167.9 million versus profit before tax of Rs. 157.6 million; loss after tax was Rs. 168.2 million versus profit after tax of Rs. 157.0 million.

• Cash profit fell to Rs. 104.6 million from Rs. 377.5 million; financial items rose to Rs. 453.3 million from Rs. 312.6 million.

• Other income included Rs. 136.1 million profit on sale of property, including Rs. 135.2 million capital surplus.

Outlook and guidance

• Management aimed to reduce White Goods losses and preserve cash, with plans to sharply curb working capital use and operating costs and strengthen divisional controls.

• Engineering order books had slackened and margins were lower; management emphasized employee productivity, customer service, cost control and information technology.

• The Engineering Projects Group expected to reach targeted performance on a good order book; Machine Tools cited a healthy pending order book and favorable longer-term demand prospects.