Fertilisers and Chemicals Travancore (FACT) Q4 03/04 earnings summary

Executive summary

• FY2003-04 remained loss-making amid severe financial stress; reported loss after tax was Rs.16,722 lakh, improving from Rs.19,993 lakh in FY2002-03.

• Lower operating levels reflected liquidity constraints, uneconomic product realizations, higher raw-material and utility costs, and suspended Cochin ammonia-urea operations.

• Net worth had eroded by more than 50% of peak net worth; the matter was reported to BIFR under the Sick Industrial Companies Act.

Financial highlights

• Total income was Rs.94,279 lakh vs. Rs.115,013 lakh YoY; net sales were Rs.76,751 lakh vs. Rs.92,718 lakh.

• Operating loss was Rs.16,714 lakh vs. Rs.20,033 lakh; pre-tax and after-tax loss were each Rs.16,722 lakh, compared with Rs.19,993 lakh a year earlier.

• Fertiliser subsidies and concessions were Rs.15,230 lakh vs. Rs.16,616 lakh; interest expense was Rs.3,281 lakh vs. Rs.3,972 lakh.

• EPS was negative Rs.4.71 vs. negative Rs.5.64; no dividend was declared.

Outlook and guidance

• A turnaround proposal depended on Government of India waiver/write-off of Rs.609.26 crore in loans and interest, Kerala sales-tax reduction on furnace oil from 17.25% to 4%, and Rs.90 crore for VRS.

• Road transport of ammonia from Udyogamandal to Ambalamedu was expected to save Rs.25 crore annually; LNG was planned as a naphtha substitute when the proposed Cochin terminal became operational.

• For FY2004-05 through October, Udyogamandal ammonium sulphate output was 103,902 tonnes and NP output 65,710 tonnes; Cochin complex fertiliser output was 231,900 tonnes.

• Caprolactam output through October FY2004-05 was 22,791 tonnes vs. 20,730 tonnes in the comparable prior period.