Galaxy Surfactants (GALAXYSURF) Q4 05/06 earnings summary

Executive summary

• Net sales rose 30.37% to ₹26,957 lakh in FY06, while net profit after tax fell to ₹566.43 lakh from ₹1,052.86 lakh as capacity underutilization and cost pressures weighed on margins.

• International business expanded to 47% of sales from 40%, with exports growing 55% and reach extending to 76 countries.

Financial highlights

• Domestic sales increased to ₹14,206.70 lakh from ₹12,474 lakh; exports rose to ₹12,750.30 lakh from ₹8,203.54 lakh.

• Profit before tax declined to ₹900.19 lakh from ₹1,682.10 lakh; net profit after tax was ₹566.43 lakh versus ₹1,052.86 lakh.

• Gross profit before interest and depreciation was ₹2,863.68 lakh versus ₹3,276.12 lakh; interest and finance charges increased to ₹881.41 lakh from ₹690.10 lakh.

Outlook and guidance

• Expected marked progress in profitable deployment of Phase II EOU capacity during FY07; fuller utilization was expected to support the bottom line.

• Strategy: maintain domestic-market leadership and grow at the industry rate, while driving quantum growth internationally and expanding specialty, value-added products.

• Price revisions were being pursued to mitigate volatile crude costs; focused R&D benefits were expected in the coming years.