Coromandel International (COROMANDEL) Q4 97/98 earnings summary

Executive summary

• FY98 marked a fourth consecutive year of improved results, despite a difficult second half; net profit rose to Rs. 3,436.66 lakh from Rs. 2,922.50 lakh.

• Higher hydrocarbon costs, subsidy reductions, rupee depreciation and freight increases were partly offset by production changes, imported urea, cost controls and sales promotion.

Financial highlights

• Revenue was Rs. 47,253.51 lakh, up from Rs. 37,623.64 lakh; sales were Rs. 35,902.60 lakh and government subsidies Rs. 10,815.58 lakh.

• Profit before tax and extraordinary item was Rs. 5,026.66 lakh; after a Rs. 170 lakh extraordinary provision for legacy cement sales-tax demands, PBT was Rs. 4,856.66 lakh.

• Net profit was Rs. 3,436.66 lakh versus Rs. 2,922.50 lakh; recommended dividend increased to 30% from 25%, tax-free in shareholders’ hands.

• Cash profit reached Rs. 5,747 lakh versus Rs. 4,781 lakh; proposed dividend including dividend tax totaled Rs. 802.55 lakh.

Outlook and guidance

• Directors expressed confidence in sustaining the growth in profitability; ammonia import infrastructure is intended to enable switching between imported and in-house ammonia based on relative cost.

• The Government was reviewing the Fertilisers Pricing Policy Review Committee report; the stated preference was phased subsidy reduction over five years, followed by decontrol and direct farmer subsidies.