West Coast Paper Mills (500444) Q4 01/02 earnings summary

Executive summary

• FY 2001-02 delivered record production, sales and net profit despite lower paper realisations and sluggish market conditions.

• Cost reductions, higher captive power generation, process efficiencies and customer-focused product and distribution initiatives supported performance.

Financial highlights

• Turnover rose 22% to Rs 487.19 cr; excluding inter-division transfers, turnover increased 15% to Rs 414.10 cr.

• Net profit rose 12% to Rs 31.86 cr; EPS was Rs 35.64 versus Rs 31.86 in FY 2000-01.

• Gross profit increased 2% to Rs 49.34 cr; operating profit was Rs 63.42 cr, while operating margin eased to 18% from 19%.

• Paper and board sales volume rose 10% to 124,941 MT; finished-goods inventory fell to 8,380 MT from 13,028 MT.

• Proposed dividend was Rs 6.50 per Rs 10 share, a 65% payout rate.

Outlook and guidance

• FY 2002-03 outlook was positive on expected higher output and realisations, lower power and pulp costs, and strengthened paper prices.

• Paper prices rebounded Rs 2,000 per tonne from FY 2001-02 lows by July 2002; output and offtake were targeted to rise by 25,000 tonnes, with exports expected to increase significantly.

• Paper capacity was expected to reach 163,750 tpa by FY 2002-03 end, followed by a planned increase to 200,000 tpa; a 500,000 tpa long-term target was proposed through inorganic growth.

• An additional 14.5 MW of power generation was planned during FY 2002-03 to meet captive requirements.