Lords Chloro Alkali (500284) Q4 09/10 earnings summary

Executive summary

• FY09-10 production rose 16% to 51,812 MT of caustic soda, but lower selling prices amid recessionary pressure pushed reported net results to a ₹10.70 lakh loss from ₹397.42 lakh profit.

• Auditors said the reported loss depended materially on recognizing land-sale gains and vendor damages as income; considering those qualifications, the loss would have been ₹1,027.48 lakh.

Financial highlights

• Sales were ₹11,428.60 lakh versus ₹12,970.85 lakh; other income increased to ₹994.42 lakh from ₹123.09 lakh, including ₹620.97 lakh profit on fixed-asset sales.

• Reported PBT was a loss of ₹27.33 lakh versus profit of ₹693.34 lakh; net loss was ₹10.70 lakh versus net profit of ₹397.42 lakh.

• Cash flow from operations was negative ₹690.70 lakh, compared with positive ₹1,000.61 lakh in FY08-09; closing cash and cash equivalents were ₹24.58 lakh.

Outlook and guidance

• FY10-11 production targets were 60,000 MT for caustic soda and 8,000 MT for stable bleaching powder; TCE production was expected to reach 350–450 MT monthly.

• A 130 TPD caustic soda brownfield expansion was expected to complete in FY10-11, lifting capacity from 207 TPD to 337 TPD; the remaining 130 TPD capacity was also targeted for commissioning next year.

• Plant refurbishment, efficiency improvements, a power-trading agreement and a proposed sodium hypochlorite plant were intended to reduce costs and improve production stability.