Chemplast Sanmar (CHEMPLASTS) Q4 18/19 earnings summary

Executive summary

• FY19 PBT before exceptional items rose 10% YoY to Rs 232.45 crore, driven mainly by improved Chloromethanes margins; PAT was Rs 187.21 crore.

• The scheme transferred Suspension PVC operations to Chemplast Cuddalore Vinyls Limited and merged Sanmar Speciality Chemicals Limited effective from the appointed date of 1 April 2018.

Financial highlights

• Sales and other income were Rs 1,269.83 crore versus restated Rs 1,152.61 crore; PBT before exceptional items was Rs 232.45 crore versus Rs 211.46 crore.

• Net profit was Rs 187.21 crore versus restated Rs 88.84 crore; FY19 included a Rs 15.10 crore exceptional gain from reversal of employee separation compensation provision.

• Finance costs were Rs 46.99 crore versus Rs 37.43 crore, while depreciation was Rs 54.88 crore versus Rs 57.00 crore.

Outlook and guidance

• FY20 PVC Paste Resin volumes are expected to maintain market share; tight availability after Korean and Chinese plant shutdowns is expected to support firm prices.

• Chloromethanes prices are expected to moderate from FY19 peaks; improved PVC Paste Resin margins are expected to support overall performance.

• Caustic imports may rise after BIS registrations, creating expected downward price pressure; custom intermediates development is intended to improve Specialty Chemicals performance in coming years.