VST Industries (509966) Q4 99/00 earnings summary

Executive summary

• Turnaround delivered: turnover rose 6% to Rs745.98cr and PBT before extraordinary items reached Rs18.38cr, despite cigarette volumes falling 7.7%.

• PAT was Rs15.70cr versus a loss of Rs88.87cr; the prior-year loss included Rs91.67cr of extraordinary items. A Re1/share dividend was recommended.

Financial highlights

• Turnover increased 6% YoY to Rs745.98cr; PBT before extraordinary items rose from Rs2.85cr to Rs18.38cr.

• PAT of Rs15.70cr followed the prior-year Rs88.87cr loss, which included Rs91.67cr in extraordinary items.

• Net interest expense fell to Rs13.83cr from Rs22.33cr, alongside borrowings declining to Rs68.96cr from Rs143.58cr.

• Ordinary dividend of Re1/share recommended; Rs4.48cr transferred to Debenture Redemption Reserve.

Outlook and guidance

• Core cigarette operations were being refocused; management said some restructuring initiatives were already reflected in improved financials and further actions were underway.

• Unmanufactured tobacco export prospects for the current year appeared bleak amid an international glut; the Tobacco Board’s 2001 FCV crop holiday was being monitored.

• North Eastern manufacturing arrangements were implemented following an excise-duty exemption; Budget 2000-01 extended MODVAT/CENVAT benefits and fortnightly excise payments to the industry.