Moser Baer posts 104.9% Q2 revenue growth

NEW DELHI: With a large growth of 104.9 percent in a traditionally weak period, Moser Baer is planning to further strengthen its management and operations. The company today announced net earnings after tax for the second quarter ending September 2003 stood at Rs 822.5 million–a growth of 104.9 percent over previous year.

The company has also announced that it has introduced the ESOPs with an allotment of up to 2,200,000 shares (pre-bonus) resulting in a dilution of up to 4.5 percent of its present issued share capital.

According to company sources, the demand for optical media continued to be robust and outpaced supply during the quarter under review. The recent price increases by global players in the industry is a clear indication of the demand-pull, which the global optical media industry is facing currently. Most manufacturers are running at full capacity.

During quarter, its media shipment volumes grew by 31 percent sequentially. The demand for optical media, exceeded supply, and order intake was 30 to 40 percent over production capacity.

"This is a record performance by Moser Baer in what is a traditionally weak period of the year. Sharp growth in media shipments, coupled with better pricing of products and yield stabilization on new lines has enabled us to improve our margins, despite the negative influences on account of anti-subsidy duty in the EU and continued appreciation of rupee." said Moser Baer ED, Ratul Puri. "We expect this healthy demand trend to gain momentum as we enter the traditionally strong winter months. The sharp growth in DVD-R sales will provide the added impetus in the second half of the FY 2003-04," he added.

"The completion of capacity expansion to 1.45 billion units, six months ahead of schedule is yet another milestone for the company and a demonstration of the excellent project execution skills of Moser Baer," said Moser Baer President PM Pai. "This expanded capacity will enable the company to capitalize on the strong market conditions and improve market share," he added.

The company also achieved progressive improvement in production levels, yields and product quality on all CD-RW and DVD-RW Lines. The Jewel Box plant continued to operate at high levels of overall equipment efficiency, with further improvements in process cycle time. In-house production of Cake Boxes also commenced during the quarter.

According to the company’s GM for International Sales and Marketing, Vivek Chaturvedi, "the optical media industry is cyclical with weak demand in H 1 of the financial year. However, the past six months have been quite robust, contrary to normal trends. The continued demand growth, is leading to considerations of yet another price increase by industry players."

Elaborating the expansion plans, he further said that the company has completed the expansion of optical media capacity to 1.45 billion units per annum. Due to the strong market conditions, and sharp growth expected in CD-R–16.8 percent CAGR during 2002-2005–and DVD-R with a CAGR of 228 percent during 2002-2005, the company plans to further increase optical media capacity from 1.45 billion units to 1.8 billion units.

Moser Baer expects to complete the new expansion project by April 2004. These proposed capacity expansions entail a capital expenditure of $ 50 million during the H2 2003-04. It is also planning multi-pronged R&D initiatives to expand market share and optimize production capacities.

(CNS)