Voltas (VOLTAS) Q4 97/98 earnings summary

Executive summary

• FY1997-98 loss after tax narrowed to Rs 95.531m from Rs 168.208m; sales including consignment sales rose by Rs 825m to Rs 15,287m.

• Management reorganised operations, pursued working-capital and cost reductions, and advanced plans to separate or partner in White Goods and Chemicals businesses.

Financial highlights

• Sales and services were Rs 10,990.730m versus Rs 10,406.110m; other income fell to Rs 100.282m from Rs 235.221m, including lower property-sale gains.

• Loss before tax improved to Rs 93.105m from Rs 167.873m; loss after tax was Rs 95.531m versus Rs 168.208m.

• Cash profit rose to Rs 169.682m from Rs 104.600m; financial items were Rs 465.381m and depreciation Rs 249.990m.

• Proposed preference dividend was 14%; preference shares were redeemed on 30 March 1998, with pro-rata dividend provided.

Outlook and guidance

• White Goods capacity utilisation was targeted to improve through contract manufacturing and commercial refrigeration orders; a proposed joint venture remained subject to approvals.

• Working-capital and operating-cost reductions, wider IT use, and monetisation or leasing of underused properties were ongoing priorities.

• Weak economic conditions could weigh on capital goods, projects and textile machinery; management planned to compete more aggressively on market share, quality and customer service.