Coromandel International (COROMANDEL) Q4 03/04 earnings summary

Executive summary

• FY04 marked a shift to a multi-location farm-inputs business after the EID Parry Farm Inputs Division merger and GFCL acquisition; combined production volume approached 2 million tonnes.

• Performance improved through higher volumes, operating efficiencies, improved market realisations, lower discounts and lower borrowing costs; results remain profitable despite rising costs and competition.

Financial highlights

• Total income was Rs 1,222.59 crore vs Rs 589.77 crore; operating sales were Rs 1,211.57 crore vs Rs 576.25 crore. FY04 includes the merged Farm Inputs Division, limiting comparability.

• PBT was Rs 70.77 crore vs Rs 46.49 crore; PAT was Rs 43.10 crore vs Rs 27.03 crore; EPS was Rs 16.97 vs Rs 13.89 on expanded capital.

• PBDIT was Rs 132.13 crore vs Rs 74.97 crore; PBIT was Rs 99.49 crore vs Rs 59.37 crore.

• Proposed dividend was 65% on expanded equity capital, compared with 60% paid in FY03.

Outlook and guidance

• FY05 outlook was good, with a normal monsoon expected; competition was expected to intensify, making cost competitiveness central to future performance.

• Phosphatic fertiliser demand in the addressable markets was expected to grow ~4% annually over the next few years; near-term DAP import needs were not expected to rise given adequate capacity.

• Priorities included value-added products, stronger distribution, aggressive marketing and entry into new markets to broaden reach and reduce geographic concentration.

• Pesticide strategy focused on specialty products, new molecules, export expansion and planned R&D investment to address generics decline and the 2005 product-patent regime.