Deepak Fertilisers And Petrochemicals (DEEPAKFERT) Q4 03/04 earnings summary

Executive summary

• FY2003-04 net profit rose 8.75% to Rs 69.72 crore despite a 15% decline in natural-gas availability; revenue fell 9% to Rs 496.30 crore, mainly on lower trading volumes.

• Chemical products contributed 60% of turnover; operating profit increased to Rs 148.24 crore from Rs 146.03 crore.

• Growth plans combined plant debottlenecking, capacity expansion, an IPA project, co-generation power and a new speciality mall, with stated project outlay exceeding Rs 400 crore.

Financial highlights

• Total sales and other income were Rs 496.30 crore versus Rs 545.97 crore; manufactured-product sales held up as trading sales declined to Rs 69 crore from Rs 113.52 crore.

• Profit before extraordinary items was Rs 103.64 crore versus Rs 98.01 crore; reported profit before tax was Rs 97.42 crore versus Rs 99.48 crore.

• Net profit was Rs 69.72 crore versus Rs 64.11 crore; a 22% dividend was recommended, unchanged YoY.

• Interest and other financial charges declined to Rs 14.45 crore from Rs 16.87 crore.

Outlook and guidance

• Dahej-Uran-Pune gas pipeline connection to Taloja was expected by mid-2005; retrofits were intended to lift existing plant capacities by 10–15% with marginal investment.

• A 70,000-tpa IPA plant, costing Rs 204 crore, was targeted for commissioning by Nov 2005; full-production sales were projected to add Rs 200 crore annually.

• A 9MW co-generation plant costing Rs 48 crore was expected by Sep 2004; a 500,000-sq-ft speciality mall costing Rs 100 crore was targeted for completion by Sep 2005.

• Further plans included ammonia and weak nitric acid debottlenecking, possible brownfield expansion, and growth through acquisitions, supply-chain investment and movement into higher-value products.