BASF India (BASF) Q4 05/06 earnings summary

Executive summary

• FY06 sales rose 4% to Rs 7,716.4 million; PBT increased 17% to Rs 705.7 million and PAT rose 20% to Rs 454.1 million.

• Higher capacity utilisation, improved Plastics, Agricultural Products and Chemicals results, and lower interest costs supported earnings growth.

Financial highlights

• Sales were Rs 7,716.4 million versus Rs 7,401.8 million; PBT was Rs 705.7 million versus Rs 600.6 million; PAT was Rs 454.1 million versus Rs 379.7 million.

• EPS rose to Rs 16.11 from Rs 13.47; consolidated FY06 PAT was Rs 453.0 million and consolidated EPS was Rs 16.07.

• Interest expense fell to Rs 23.6 million from Rs 61.1 million; reported other income included Rs 28.8 million from the Phorate transfer and Rs 1.3 million from the Textile Dyes transfer.

• Operating cash flow was Rs 433.6 million versus Rs 842.2 million; cash generated from operations was Rs 717.0 million versus Rs 1,088.6 million.

Outlook and guidance

• Chemical-industry and end-user demand outlook was encouraging, supported by expected healthy economic and industrial growth and capacity additions among customers.

• Dispersions, specialty chemicals, textiles, chemicals and nutrition businesses described their outlook as favourable, citing growing end markets and customer demand.

• Polymer dispersions capacity expansion from 20,000 to 65,000 tpa was expected to commission in Q1 2007; estimated project cost Rs 410 million, funded by internal accruals and borrowings.

• Crop-protection market was expected to remain flat in the midterm as growth in fungicides and herbicides could be offset by reduced insecticide use from GMO crop penetration.