Linde India (523457) Q4 2019 earnings summary

Executive summary

• FY2019 EBITDA reached a record Rs. 4,356.54 million; PAT was Rs. 7,271.79 million, including Rs. 8,407.55 million exceptional profit from the South Region divestment.

• Revenue from operations fell 19.6% YoY to Rs. 17,617.86 million, but Ind AS 115 reduced reported revenue and power costs equally by Rs. 4,976.61 million; underlying gases revenue grew 3.1%.

Financial highlights

• Revenue from operations was Rs. 17,617.86 million vs Rs. 21,916.54 million in 2018; EBIT rose to Rs. 2,584.00 million from Rs. 1,498.71 million.

• PBT before exceptional items increased to Rs. 1,721.50 million from Rs. 471.70 million; reported PBT was Rs. 10,129.05 million vs Rs. 471.70 million.

• PAT was Rs. 7,271.79 million vs Rs. 334.86 million; excluding the divestment gain, PAT was Rs. 1,162.35 million and EPS was Rs. 13.63, versus reported EPS of Rs. 85.27.

• Operating cash flow was Rs. 3,267.49 million; cash and cash equivalents ended at Rs. 2,400.41 million vs Rs. 1,245.76 million.

Outlook and guidance

• COVID-19 lockdowns and restrictions severely disrupted economic activity; short-term outlook was considered grim, while medium- to long-term prospects remained cautiously positive.

• India's steel demand was expected to contract ~18% in 2020, with a sharp recovery expected in 2021, supported by infrastructure and construction projects and improving consumer sentiment.

• Growth opportunities cited included healthcare gases, food and beverage applications, infrastructure, steel and refinery projects, and potential manufacturing shifts from China to India.

• Two 200-tpd ASUs and five cryogenic nitrogen plants were scheduled for completion in 2020; the 2,200-tpd JSW Dolvi ASU was also expected to complete in 2020.