Welspun Living (WELSPUNLIV) Q4 00/01 earnings summary

Executive summary

• 18-month period to 31 Mar 2001 included the spinning division until its demerger, making comparisons with the prior period non-comparable; towel operations became the core focus.

• Restructuring, capacity expansion, direct marketing and cost savings supported improved operating performance despite higher fuel costs and weak global demand.

Financial highlights

• Revenue from sales and services was Rs. 3,364.30 million for the 18 months, versus Rs. 3,249.21 million in the prior 18 months; periods are not comparable after the spinning demerger.

• Profit before tax and extraordinary items was Rs. 261.80 million, versus a loss of Rs. 3,151.46 million; extraordinary items were a debit of Rs. 504.47 million and prior-year adjustments a debit of Rs. 74.82 million.

• Net profit before extraordinary items and prior-year adjustments was Rs. 261.80 million; reported EPS was Rs. 0.86 and no dividend was recommended.

• Total finance expenses were Rs. 680.13 million and depreciation was Rs. 195.72 million for the period.

Outlook and guidance

• Management expected cyclical demand weakness to reverse, with normal annual demand growth and stable global supply potentially supporting price increases.

• Growth opportunities included increased UK sourcing from India, a shift in US sourcing, and expanding direct marketing through the New York-based subsidiary.

• Priorities included financial restructuring, product innovation, lower production costs, operational efficiency, quality improvement and stronger international market positioning.