Lords Chloro Alkali (500284) Q4 13/14 earnings summary

Executive summary

• Plant operations remained shut throughout FY2013-14 while major equipment was revamped; no sales were recorded and net loss widened to Rs. 422.42 lakh from Rs. 322.88 lakh.

• Membrane, anode and cathode replacements were ordered from Asahi Kasei Chemicals Corporation, with deliveries underway and restart targeted after revamp completion.

Financial highlights

• FY2013-14 revenue from operations was nil; other income was Rs. 41.12 lakh versus Rs. 400.82 lakh, driving total revenue down to Rs. 41.12 lakh from Rs. 400.82 lakh.

• Loss before tax was Rs. 465.58 lakh versus Rs. 366.32 lakh; net loss was Rs. 422.42 lakh versus Rs. 322.88 lakh.

• Depreciation was Rs. 233.12 lakh versus Rs. 417.37 lakh; finance cost fell to Rs. 0.33 lakh from Rs. 15.13 lakh.

• Operating cash outflow was Rs. 358.97 lakh; investing cash outflow was Rs. 837.18 lakh, offset by Rs. 1,243.45 lakh net financing inflow.

Outlook and guidance

• Revamp of the existing 107 TPD caustic soda facility was underway, with restart expected in October 2014; completion was forecast within four to five months.

• After restarting the 107 TPD plant, the plan was to revamp remaining facilities and reach total installed capacity of 334 TPD.

• Funding needs were expected to be met through promoter contributions, internal accruals and bank or financial institution financing after the 107 TPD plant was streamlined.

• Longer-term plans included forward integration into value-added chlorine derivatives to cushion demand and price fluctuations.