The Hindu Business Line : Moser Baer Q4 net zooms

New Delhi May 1 Reduction in raw material cost, enhanced productivity and increase in the price of recordable CDs led to optical disc manufacturer Moser Baer reporting increase in net profit to Rs 39.72 crore for the last quarter ended March 31. This is against Rs 35 lakh for the corresponding previous period. The company reported 3.45 per cent increase in fourth-quarter net sales to Rs 525.01 crore (Rs 507.49 crore). EBITDA for the quarter stood at Rs 172.58 crore (Rs 107.34 crore), an increase of 60.75 per cent.

Net profit for the year rose to Rs 109.79 crore (Rs 4.67 crore). Net sales were up 19.09 per cent to Rs 1,981.91 crore (Rs 1,664.12 crore).

EBITDA increased to Rs 602.21 crore (Rs 413.60 crore), up 45.50 per cent.

"During the quarter, we incurred a loss of Rs 8 crore, and Rs 13 crore for the entire year, on the home entertainment business. Volumes are small and margins are under pressure due to high marketing costs. But as we reach the expected volumes, our margins would be 20-30 per cent," said Mr Yogesh Mathur, CFO.

He added that the optical disc business had reverted to normal levels of operating efficiencies.

This was primarily due to an increase in prices of CDs by 30-40 per cent along with reduction in price of polycarbonate, the raw material used in manufacturing discs.

During the quarter, the company commenced its entertainment business, the start up cost of which subdued the margins. The company also commissioned trial production of its crystalline silicon line and started commercial shipment in April. During the quarter, the company established a wholly owned subsidiary — Moser Baer Investments Ltd — through which it acquired 100 per cent stake in Photovoltaic Holdings Plc and Moser Baer Solar Plc. It also acquired 81 per cent stake in Dutch Company — O M & T B.V, the research and development unit of Phillips.

Since the company's other subsidiaries such as its home entertainment business and its photovoltaic business have just started, it has declared consolidated results.

Gross revenue in Q4 of FY '07 at INR 5, 502.2 million shows an increase of 3.8 % over Q4 of FY '06, and 5.1 % on a sequential basis.

EBITDA at INR 1, 725.8 million grew 60.8% over Q4 of FY '06 and 5.6% on a sequential basis.

EBITDA margin on optical media business (net of entertainment & other) during the quarter is 31.7%. EBITDA margin for Moser Baer India Limited during the quarter is 29.1%.

The company achieved a profit before tax of INR 448.2 million compared to of INR 34.6 million in Q4 of FY '06, representing a sharp growth of 13x in profits. This is led by improving industry environment, robust shipments of media and increasing production efficiencies.

The profit before tax on the optical media business (net of entertainment & others) during the quarter is INR 567 million.

The entertainment business commenced operations during the quarter. The start up costs for the same subdued the margins during the quarter.

The company achieved a profit after tax of INR 397.2 million during Q4 of FY '07.

The trial production of crystalline silicon line competed successfully. Commercial shipment started in April. MBPV made significant progress on its silicon sourcing strategy with the announcement of a strategic stake in Solarvalue Proizvodnja d.d .

Year Ended 31 March 2007

Gross revenue for FY '07 at INR 20, 740.3 million is an increase of 19.8 % over FY '06, representing the robust growth in volumes and impact of expanded capacity during the year.

EBITDA at INR 6,022 million grew by 45.6% over FY '06. EBITDA margin reflects improved optical media industry fundamentals.

The company achieved a profit after tax (including deferred tax impacts) of INR 1, 097.9 million in FY07, a 23.5x growth over FY '06.

During the year the company released USD 37 million of cash from working capital.

Effective April 1, 2006 the Company adopted the revised Accounting Standard on Employee Benefits. Pursuant to the adoption, the additional obligations of the Company amounted to Rs. 1.8 million. As required by the standard, the obligation has been recorded with the transfer of Rs. 1.8 million to general reserve.

2. There were no outstanding complaints from the shareholders at the beginning of the quarter and all the 27 complaints received from the shareholders during the quarter have been replied to satisfactorily.

3. During the quarter, the Company established a wholly owned subsidiary- Moser Baer Investments Limited and through this Company acquired 100% stake in Photovoltaic Holdings Plc and Moser Baer Solar Plc located in Isle of Man. It also acquired 81% stake in a Dutch Company - O M & T B.V through one of its Cypriot subsidiaries.

4. The Board of Directors recommended payment of a dividend @ Rs. 1.5 per share for the year 2006-07 amounting to Rs.167,401,776 on 111,601,184 equity shares of Rs. 10 each.

5. During the quarter ended March 31, 2007 , 87,740 equity shares of Rs. 10 each fully paid up were issued and allotted pursuant to the exercise of stock options under the Moser Baer India Limited Employees Stock Option Scheme (2004). 88,240 Equity shares have been allotted under stock options during the year 2006-07.

6. The Consolidated financial statements of Moser Baer India Limited (MBIL) and its wholly/ majority owned domestic and foreign subsidiaries ('the Group') are prepared in accordance with Accounting Standard (AS) 21 on 'Consolidated Financial Statements' issued by the Institute of Chartered Accountants of India. All significant intra group balances and intra group transactions and resulting unrealised profits have been eliminated. Investments in business entities in which MBIL does not have control, but has the ability to exercise significant influence over operating and financial policies (generally 20% - 50% ownership), are accounted for by the equity method in accordance with AS-23 on Accounting for Investments in Associate in Consolidated Financials Statements.

7. The company is primarily in the business of manu facture and sale of Optical Storage Media. The other activities namely distribution of video content, development, operation and maintenance of sector specific SEZ for non-conventional energy and manu facture of photovoltaic cells and modules (through certain subsidiaries) are in a 'start up' phase and are yet to generate revenue/ acquire significant assets. Accordingly, segment information has not been disclosed.

8. Previous year's figures have been regrouped/ rearranged to conform to the current year's classification.

9. The above results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on April 30, 2007 . The information presented above is extracted from the respective audited financials statements as stated.

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