West Coast Paper Mills (500444) Q4 98/99 earnings summary

Executive summary

• FY99 net profit rose to Rs 10,48,20,153 from Rs 6,18,81,461; profit before tax increased to Rs 12,28,20,153 from Rs 7,38,81,461.

• Paper and duplex-board sales volume increased, but their combined sales value declined 1.95% YoY amid sluggish markets and lower prices; cost controls and captive power supported improved results.

• Recommended dividend: Rs 2.80 per equity share, or 28%; proposed dividend totaled Rs 2,50,33,904.

Financial highlights

• Total income was Rs 3,45,66,28,350 versus Rs 3,31,29,68,854; sales were Rs 3,39,88,23,227 versus Rs 3,25,63,75,256.

• Gross profit increased to Rs 22,40,05,681 from Rs 16,44,52,972; net profit rose to Rs 10,48,20,153 from Rs 6,18,81,461.

• Depreciation was Rs 10,11,85,528 versus Rs 9,05,71,511; tax provision was Rs 1,80,00,000 versus Rs 1,20,00,000.

• General Reserve transfer rose to Rs 8 crore from Rs 6 crore; closing profit carried forward was Rs 1,67,92,588.

Outlook and guidance

• First four months' paper/paperboard production was 30,092 MT versus 30,449 MT; duplex-board production was 7,458 MT versus 7,256 MT.

• Industry prospects were seen improving as excess capacity was absorbed, education-sector demand picked up and overseas markets improved.

• Optical-fibre cable orders from the Department of Telecommunications totaled 4,830 CKms; capacity expansion from 6,600 to 9,000 CKms was targeted for commissioning by March 2000.

• Export development and new overseas markets were targeted; demand, competition and product prices remained key conditions for paper-market recovery.