Deepak Fertilisers And Petrochemicals (DEEPAKFERT) Q4 05/06 earnings summary

Executive summary

• FY06 total revenue rose 18% to Rs. 595.49 crore; PBT was Rs. 111.70 crore and net profit Rs. 79.77 crore, broadly flat YoY despite feedstock constraints and July floods.

• Growth reflected stronger fertiliser and industrial-chemical sales, increased trading volumes and improved product realisations; a proposed 30% dividend was recommended.

Financial highlights

• Net sales reached Rs. 562.86 crore versus Rs. 478.17 crore; traded-product sales rose to Rs. 208.71 crore from Rs. 110.36 crore.

• PBT was Rs. 111.70 crore versus Rs. 112.46 crore; net profit was Rs. 79.77 crore versus Rs. 79.75 crore.

• Reported EPS remained Rs. 9.04; EPS excluding extraordinary items was Rs. 7.60 versus Rs. 8.54 in FY05.

• The 30% proposed dividend, including corporate dividend tax, would absorb Rs. 30.19 crore.

Outlook and guidance

• The GAIL Dahej-Uran pipeline was expected to start operations in H1 2007, improving natural-gas availability and supporting better Taloja capacity utilisation.

• The Iso Propyl Alcohol plant was expected to start in H1 FY07; domestic and international customer response was strong, with international prices firm.

• Ishanya was expected to open around mid-FY07; leasing had exceeded 60% of leasable space by the report date.

• The Paradip integrated nitric acid and ammonium nitrate project was planned for completion on a two-year fast-track schedule.