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For the quarter ended June 2006 Finolex Cables have reported a revenue growth of 48% to Rs 211.74 crore. The operating profit margin has improved by 360 to 11.4%. Improvement in margins coupled with surge in revenue has led to a 119% jump in operating profit to Rs 24.24 crore. However due to fall in other income and shoot up in provision for tax net profit of the company has reported growth of 68% to Rs 22.56 crore.
Quarterly Results
Net sales for the quarter have increased by 48% to Rs 211.74. As percentage of sales (net of stock adjustment) cost of raw materials consumed has increased to 79.28% from 73.62% in corresponding quarter in previous year. However as percentage of sales staff cost and other expenses have declined to 3.28% and 8.51% respectively. (Last year: 5.1% and 13.74%). Thus operating profit margin has improved by 360 to 11.4%. Improvement in margins coupled with surge in revenue has led to a 119% jump in operating profit to Rs 24.24 crore.
Fall in other income by 4% to Rs 13.55 crore has restricted PBIDT growth to 50%. Interest expenses have increased by 22% to Rs 3.34 crore while provision depreciation has declined by 9% to Rs 6.38 crore. Thus, PBT has posted a growth of 81% to Rs 28.07 crore. Provision for tax has shoot up by 167% to Rs 5.51 crore. Finally, PAT of the company has posted a growth of 68% to Rs 22.56 crore.
Segment Results
a) Electrical Cables
For the quarter ended June 2006 the electrical cables business showed a growth in revenue of 51% to Rs 157.42 crore. PBIT margins for the segment have improved to 18.36% from 12.67%. As a result the PBIT of the division has zoomed by 119% to Rs 28.9 crore. This segment contributes 44% of the total sales revenue and 95% of total PBIT for the company.
b) Communication Cables
The Communication Cables business showed a growth in revenue of 42% to Rs 29.16 crore. The segment has reported a loss of Rs 0.19 crore that was 95% less than corresponding quarter in previous year.
c) Copper rods
The Copper rods business showed a growth in revenue of 144% to Rs 168.81 crore. PBIT margins for the segment have fallen to 0.86% from 1.03%. The PBIT of the division has reported a growth of 106% to Rs 1.46 crore. This segment contributes 47% of the total sales revenue and 5% of total PBIT for the company.
e) Other
The other segment has showed a surge in revenue of 28% to Rs 4.56 crore. The segment has reported a profit of Rs 0.13 crore as compared to loss of Rs 0.32 crore in corresponding quarter in previous year.
Yearly Results
On 21st October 2005 the high court of Bombay had approved the merger of erstwhile subsidiaries namely, Finolex Wire Products and Finolex Finance with the Company, effective from 1st April 2005. Thus, financial results were prepared by the company after taking into consideration the merger effect. In view of the merger effect, the annual results of the company are not comparable.
For the year ended March 2006 net sales of the company were 787.78 crore. The operating profit margins for the year stood at 10.2%. Net profit for the period stood at Rs 50.37crore.
Other Developments
During June 2006, the Company launched Modular Electrical Switches in the classic rang category. Company is planning to launch Compact Fluorescent Lamps in early August 2006.
The Company has also planed to invest up to Rs 200 crore in the State of Uttaranchal (near Roorkee city to set up a green field manufacturing facility for light duty electrical cables, certain types of communication cables and modular electrical switches. The Investment is expected to occur in two stages. The first stage manufacturing is planned to go on stream before and of the current financial year 2006-07.
The non-promoter shareholding of the company has remained unchanged at 68.05%.
As on 28th July 2006 the closing price of Finolex Cables on BSE was Rs 283.6.
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