Chennai Petroleum (500110) Q4 04/05 earnings summary

Executive summary

• FY 2004-05 delivered record profitability and throughput, with total crude processed of 8.92 MMT, 27% above the prior year, and installed refining capacity increased to 10.5 MMTPA.

• Recommended dividend reached a record 120% of paid-up capital, versus 50% in FY 2003-04.

Financial highlights

• Gross turnover was Rs.16,270.64 crore, up 72.53% YoY; profit before tax was Rs.933.63 crore, up 63.10%.

• Profit after tax rose to Rs.596.97 crore from Rs.400.05 crore; EPS increased to Rs.40.08 from Rs.26.86.

• Profit before interest, depreciation and tax reached Rs.1,299.67 crore, up 76.46% YoY; internal resources generated were Rs.807.39 crore versus Rs.513.10 crore.

• Reserves and surplus rose 26.87% to Rs.1,855.33 crore; book value per share increased to Rs.134.51 from Rs.108.09.

Outlook and guidance

• Potential sharing of product-subsidy under-recoveries by refiners in FY 2005-06 could affect profitability; the burden-sharing scheme was still being finalized.

• Planned initiatives included a 150,000 TPA polypropylene plant estimated at Rs.1,155.88 crore and an Ennore regasified LNG project initially estimated at Rs.1,700 crore, with implementation proposed by 2010.

• Feasibility work covered Euro IV fuel-quality investments for the April 2010 specifications, including isomerisation and expanded diesel hydrotreating capacity.

• A 5.8 MGD desalination plant was being advanced at an estimated Rs.193.31 crore, subject to environmental and other clearances.