Alkyl Amines Chemicals (506767) Q4 05/06 earnings summary

Executive summary

• Gross income rose 12% YoY to Rs 12,955 lacs; PBT increased 74% to Rs 603 lacs and PAT rose 41% to Rs 410 lacs.

• Results improved despite higher ethyl alcohol prices, which challenged alcohol-based chemical producers.

Financial highlights

• Product sales increased 12% to around Rs 124 crore; domestic sales rose 15% to Rs 10,505 lacs, while export sales eased to Rs 1,807 lacs from Rs 1,829 lacs.

• PBIDT was Rs 1,635 lacs versus Rs 1,463 lacs; interest and financial expenses fell to Rs 538 lacs from Rs 617 lacs.

• PAT was Rs 410 lacs versus Rs 290 lacs; basic EPS increased to Rs 4.63 from Rs 3.27.

• Proposed dividend rose to Rs 1.80 per share from Rs 1.50; total dividend including tax was Rs 182 lacs.

Outlook and guidance

• FY07 pharma demand in India was expected to support sales volumes; basic-product exports looked weak, with better export volumes expected from newly developed intermediates.

• Contract manufacturing was expected to deliver improved contribution; management anticipated profitability gains from yield improvement, cost control, sourcing and facility utilization.

• The Kurkumbh cogeneration plant was expected to lower fuel and power costs and improve power quality after commissioning.

• Carbon-credit eligibility could add future revenue after validation and commissioning; initial CO2 reduction was projected at 12,500 MT annually, with market pricing then near €10/MT.