Voltas (VOLTAS) Q4 99/00 earnings summary

Executive summary

• Restructuring and divestment of uneconomic businesses improved operating profit, but lower sales and a weak capital-goods market kept after-tax profit below the prior year.

• Cost reduction, workforce resizing, and a stronger focus on services and higher-value products were central to the turnaround and forward strategy.

Financial highlights

• Sales and services were Rs 8,243.4 million in FY1999-2000 versus Rs 9,842.8 million in FY1998-99; other income rose to Rs 166.6 million from Rs 145.1 million.

• Profit before financial items, depreciation and extraordinary items was Rs 434.6 million versus Rs 416.2 million; PBT was Rs 59.6 million versus Rs 141.2 million.

• PAT was Rs 55.0 million versus Rs 127.9 million; EPS was Rs 1.7 versus Rs 3.9.

• Financial items declined 32% to Rs 240.6 million from Rs 352.4 million; extraordinary items were a net expense of Rs 9.5 million versus income of Rs 260.4 million.

Outlook and guidance

• Management expected better performance in FY2000-01, with continued cost control, IT-enabled processes, global competitiveness, high-value products and engineering services.

• Capital-goods market growth was expected to remain modest, except in selected segments; service revenue was being pursued to counter declining product margins.

• Property rental income was expected to rise at least 20% in the next financial year.