Max India

Max India posted net loss of Rs 2.37 crore for the quarter ended March 2010 compared to 6.76 crore in the corresponding pervious period. The net loss during the quarter is primarily on the back of poor operational performance while that of in the corresponding previous period was due to one time expenses. Total income from operations rose by 7% to Rs 97.35 crore. Operating profit margins contracted by 310 bps to 6.9% resulting operating profit to decline by 26% to Rs 6.72 crore. With increase in the interest cost and depreciation by 39% to Rs 6.06 crore and 13% to Rs 3.33 crore, the company has posted losses at PBT level itself at Rs 0.62 crore compared to profit of Rs 2.27 crore in the corresponding pervious period.

Consolidated Yearly Performance

Sales on consolidated basis for the year ended March 2010 increased by 24% to Rs 5571.40 crore and income from investment activities have grown more than five times to Rs 2081.96 crore. As a result, total income from operations increased by 58% to Rs 7623.36 crore. Life insurance business rose by 68% to Rs 6898.78 crore and contributed 89% of total sales. Healthcare business increased by 27% to Rs 483.87 crore and contributed 6% of total sales. Specialty Plastics products and business investment declined by 8% to Rs 339.82 crore and 57% to Rs 20.22 crore.

Operating profit margins turnaround and stood at 1.1% resulting operating profit to clock Rs 84.12 crore (compared to loss of Rs 224.04 crore). With double fold rise in other income to Rs 75.47 crore, PBIDT stood at Rs 159.59 crore. At PBIT level, Life insurance business turnaround profits to Rs 33.90 crore compared to loss of Rs 402.48 crore in the corresponding previous period. Healthcare business witnessed sharp degrowth of 81% to Rs 9.01 crore and specialty plastics product business fell by 23% to Rs 31.00 crore. Health insurance reported losses of Rs 14.23 crore compared to nil in the corresponding previous period.

As Life insurance business turnaround during the year, the losses at PBT decreased to Rs 40.57 crore compared to 334.39 crore in the corresponding previous period. Taxation of Rs 3.39 crore and tax credit of Rs 23.84 crore led net loss to stand at Rs 71.59 crore compared to net loss of Rs 218.38 crore.

Standalone Quarterly Performance

The net sales increased by 9% to Rs 88.90 crore and income from investment activities & other operating income declined by 9% to Rs 8.45 crore totaling income from operation to increase by 7% to Rs 97.35 crore. Revenues from Specialty plastics Products increased by 8% to Rs 92.17 crore and contributed 94% of total sales and revenues from business investments declined by 3% to Rs 5.48 crore and contributed 6% of total sales. Operating profit margins contracted by 310 bps to 6.9% resulting operating profit to decline by 26% to Rs 6.72 crore.

Other income increased by 349% to Rs 2.05 crore led PBIDT to de-grow by 8% to Rs 8.77 crore. At PBIT level, specialty business margins contracted by 280 bps to 9.3% resulting segment profit to decline by 17% to Rs 8.59 crore and contributed 61% of total PBIT. Further, increase in the interest cost by 39% to Rs 6.06 crore and depreciation by 13% t Rs 3.33 crore turned profits at PBT before EO into red. As a result, Loss at PBT before EO is at Rs 0.62 crore compared to profit of Rs 2.27 crore in the corresponding previous period.

Max HealthStaff International, a wholly owned subsidiary of the company is engaged in healthcare staffing in India and abroad, more particularly in USA. The Placement of Healthcare Personnel in USA is subject to availability of immigrant visas which are currently unavailable given the visa retrogression in force. Accordingly, based on Prudent accounting practices and abundant caution, the company has provided for diminution in the entire value of investment and loans aggregating Rs 22.62 crore as EO expenses in Q4 FY'09.

Nil EO expenses compared to Rs 22.62 crore in the corresponding previous period led company post loss in PBT level. The loss at PBT level is Rs 0.62 crore compared to Rs 20.35 crore in Q4 FY'09. Taxation of Rs 1.75 crore (compared to tax credit of Rs 13.59 crore) led net loss for the quarter to stand at RS 2.37 crore compared to net loss of Rs 6.76 crore in the corresponding previous period.

Standalone Yearly Performance

For the year ended March 2010, the sales declined by 7% to Rs 330.32 crore and other operating income declined by 54% to Rs 28.91 crore totaling income from operations to decline by 14% to Rs 359.23 crore. Operating profit margins contracted by 690 bps to 7.2% resulted, operating profit to decline by 56% to Rs 25.93 crore. The marginal dip in the interest cost by 10% to Rs 14.56 crore and increase in the depreciation by mere 4% to Rs 12.60 crore led PBT before EO to decline by 92% to Rs 2.58 crore. Absence of EO expenses compared to Rs 22.62 crore in the corresponding previous period led PBT to decline by 75% to Rs 2.58 crore. Taxation of Rs 3.17 crore compare to tax credit of Rs 11.42 crore in the corresponding previous period led company to post net loss of Rs 0.59 crore as against to net profit of Rs 21.84 crore in the corresponding previous period.

Key highlights on consolidated for FY'10

Max New York Life Insurance

• Gross Premium Income for FY'10 at Rs 4861 crore, grew by 26% on yoy basis.
• Individual First Year Premium (adjusted for single pay) at Rs 1584 crore, down 1% on yoy basis.
• Unit linked products contribute 73% to new sales for the year
• Conservation ratio for FY1 improved to 83% from 82% in FY'09.
• Polycyholder and Shareholder P&L combined reports profits of Rs 24 crore in FY'10 against loss of Rs 419 crore in FY'09.

Max Healthcare

• Revenues across network of hospitals for FY'10 at Rs 534 crore, an increase of 26% on yoy basis.
• Average revenues per occupied bed per day for FY'10 at Rs 20431, grew by 5% on yoy basis.
• Average length of stay for the year is at 3.4 days.
• Average occupancy across all healthcare facilities improved from 65% in FY'09 to 73% in FY'10.

• During the quarter ended March 31 2010, Max India made an additional investment of Rs 141.94 crore in the equity capital of its subsidiary Max New York Life Insurance Company taking total investment of the company in MNYL to Rs 1460.58 crore.
• Pursuant to shareholder's approval in Extra Ordinary General Meeting held on January 22 2010, the company has allotted 6019925 compulsorily convertible debentures (CCDs) of the face value of Rs 867 each for an aggregate consideration of Rs 521.93 crore to Xenok, a wholly owned indirect subsidiary of GS capital Partners VI fund, L P and certain affiliated funds which are controlled by the Goldman sachs group ince on a preferential basis. The aforesaid CCDs bearing a coupon of 12% per annum will have to be compulsorily converted into four equity shares of face value of Rs 2 each at a premium of Rs 214.75 equity share on or before 15 months from the date of issue of CCDs.
• Pursuant to shareholders approval in Extra Ordinary General Meeting held on January 22, 2010, the Company has allotted 20,00,000 warrants of the face value of Rs. 867/- each to Dynavest India, one of the promoter group companies on February 6, 2010. Each warrant entitles the holder thereof to subscribe to four equity share of Rs. 2/- each in the Share Capital of the Company at a premium of Rs. 214.75 per equity share. Each warrant is convertible into four Equity Share as per prevalent SEBI guidelines at any time before expiry of 18 months from the date of allotment. In consideration of the warrants, the Company has received a deposit of Rs. 86.70 crore (being 50% of the consideration for the issue of shares arising upon conversion of the warrants).
• On February 26, 2010, the Company allotted 18,112 equity shares of Rs. 2/- each at par to its employees, arising from the exercise of options in the ratio of one equity share for every option granted under the Employee Stock Option Plan-2003.
• In line with the expansion plans of the Company, the Board of Directors of the Company in its meeting held on March 30, 2010 approved the proposal of MNYL, a 73.68% subsidiary to issue equity shares of approximately 4% of post issue equity base of MNYL to Axis Bank (Axis Bank) at par. The aforesaid equity issuance shall come into force post execution of definitive agreements and receipt of requisite regulatory approvals Thereafter, on May 03, 2010, MNYL signed corporate agency agreement with Axis Bank for a period of ten years whereby Axis Bank would be distributing life Insurance products of MNYL across India.
• Pursuant to the settlement of a dispute between General Binding Corporation ('GBC') and the Company arising out of the breach of manufacturing and sale agreement by GBC, the Company and GBC have executed a settlement agreement on May 18, 2010. As per the terms of the settlement agreement GBC is required to pay USD 3.75 Mn (approx. Rs. 17 Crore) to the Company as a settlement amount. Subsequently, in May 2010, the Company has received 50% of this amount.

Max India: Standalone Financial Result

Max India: Standalone Segmental Result

Max India: Consolidated Financial Result

Max India: Consolidated Segmental Result