Whirlpool of India (500238) Q4 06/07 earnings summary

Executive summary

• FY07 sales rose 18.3% to Rs.1,591.88 crore; PBT before extraordinary items and tax was Rs.12.68 crore, versus a Rs.39.68 crore loss in FY06.

• Net loss narrowed to Rs.32.16 crore from Rs.380.97 crore; FY07 included Rs.18.32 crore of voluntary retirement scheme (VRS) compensation.

• Growth was driven by product launches, improved mix, market-share gains in refrigerators and washing machines, and exports up 34% in value.

Financial highlights

• Sales, net of returns and before excise duty, were Rs.1,591.88 crore versus Rs.1,345.61 crore; service income was Rs.30.36 crore versus Rs.30.15 crore.

• PBT before depreciation and tax was Rs.28.79 crore versus Rs.36.95 crore; PBT after depreciation and before tax was a loss of Rs.5.64 crore versus Rs.53.33 crore.

• Net loss was Rs.5.32 crore versus Rs.38.10 crore; EPS was -Rs.1.62 versus -Rs.3.89.

• Operating cash flow was Rs.85.87 crore versus Rs.41.72 crore; operating profit before working-capital movements was Rs.57.44 crore.

Outlook and guidance

• FY08 plans included new refrigerator capacities and wash systems, expansion of the Pondicherry cabinet line, and more aggressive microwave marketing.

• A new split and window AC range was planned for summer 2007; expansion into high-end hobs, hoods and ovens was also planned.

• Management expected refrigerator and washer growth trends to continue and AC and microwave markets to keep growing at 25%+; no company-level earnings guidance was stated.