Whirlpool of India (500238) Q4 04/05 earnings summary

Executive summary

• FY05 brought improved domestic unit and value sales and export growth, but reported a net loss of Rs 9,979.95 lakh amid commodity cost pressure, competition and restructuring effects.

• The reporting year covered 12 months versus 15 months in the prior period, so period-to-period financial comparisons are not strictly comparable.

Financial highlights

• Sales, net of returns and excise, were Rs 96,521.38 lakh; service income was Rs 2,744.78 lakh and other income Rs 4,047.59 lakh.

• Loss before tax was Rs 9,938.70 lakh and net loss Rs 9,979.95 lakh, versus net loss of Rs 3,364.99 lakh in the prior 15-month period.

• Operating loss before depreciation and tax was Rs 6,721.82 lakh; interest and finance charges were Rs 2,496.62 lakh.

• Operating cash flow was positive Rs 885.67 lakh, versus negative Rs 256.38 lakh in the prior 15-month period; closing cash and equivalents were Rs 2,461.11 lakh.

Outlook and guidance

• Management expected significant improvement in FY06 as the new trade strategy, recapitalization and restructuring reduce costs and improve productivity; restructuring could weigh on short-term results.

• New Genius Direct Cool refrigerators and MagiCool air conditioners launched in April 2005; further products would extend 6th Sense technology across the range.

• Management saw growth potential in refrigerators, differentiated washing machines, air conditioners and high-end cooking appliances, including microwaves.