Welspun Corp (532144) Q4 03/04 earnings summary

Executive summary

• FY04 delivered strong operating growth, with production up to 261,817 MT and PAT of Rs. 7,197.67 lakh; major GAIL, NIGC and PEDCO orders drove execution.

• Exports rose 78% to Rs. 35,673 lakh; no dividend was recommended as accruals were used to prepay high-cost debt.

Financial highlights

• Net sales were Rs. 82,766.35 lakh vs Rs. 38,413.14 lakh in FY03; reported turnover growth was 115%.

• Profit before tax and exceptional items was Rs. 11,573.84 lakh vs Rs. 103.53 lakh; an exceptional charge of Rs. 358.46 lakh brought PBT to Rs. 11,215.38 lakh.

• PAT was Rs. 7,197.67 lakh vs Rs. 154.71 lakh; EPS was Rs. 5.11 vs Rs. 0.11.

• Finance costs declined to Rs. 2,300.33 lakh from Rs. 3,651.51 lakh; the directors cited a 37% reduction.

Outlook and guidance

• Spiral mill order book was fully booked for FY05; targeted turnover was over Rs. 1,000 crore, barring unforeseen circumstances.

• Agip Oil Company, Libya and Hyundai Heavy Industries for ONGC’s MUT project added major orders alongside the PEDCO, Iran sour-service order under execution.

• Steel supply tightness, rising steel prices and foreign-exchange volatility could pressure profitability; management said it was taking steps to limit impacts.