VST Industries (509966) Q4 03/04 earnings summary

Executive summary

• FY ended Mar. 31, 2004: net sales rose to Rs 28,768 lakh from Rs 28,144 lakh, while PAT fell to Rs 2,857 lakh from Rs 3,824 lakh; VRS charges and tax pressures weighed on earnings.

• New cigarette brands, higher leaf exports, manufacturing upgrades and cost controls supported operating performance despite a flat, difficult cigarette market.

Financial highlights

• Net sales Rs 28,768 lakh vs Rs 28,144 lakh; PBT Rs 6,585 lakh vs Rs 6,753 lakh; PAT Rs 2,857 lakh vs Rs 3,824 lakh.

• EPS Rs 18.50 vs Rs 24.76; proposed dividend Rs 6 per share, equal to 60% of face value.

• Consolidated net sales Rs 33,483 lakh and PAT Rs 2,912 lakh; consolidated EPS Rs 18.86.

Outlook and guidance

• Cigarette market expected to remain stagnant; the Tobacco Act effective May 1, 2004 and rising central and state taxes were expected to make conditions more challenging.

• Strategy focused on opportunities across cigarette segments, new product variants and expanding brand presence to improve sales and market share.

• Debt-free objective was expected to be achieved within the next few months.