Lords Chloro Alkali (500284) Q4 96/97 earnings summary

Executive summary

• FY 1996-97 sales and other income were Rs.14,952.89 lakh, down from Rs.15,760.43 lakh; profit after tax fell to Rs.4.64 lakh from Rs.816.12 lakh.

• Severe power cuts reduced caustic soda output; higher electricity costs and financing charges together adversely affected profitability by Rs.884 lakh.

• No dividend was recommended in view of the marginal profit.

Financial highlights

• Sales were Rs.14,574.40 lakh versus Rs.15,473.58 lakh; other income rose to Rs.313.84 lakh from Rs.244.30 lakh.

• Operating profit before interest and depreciation was Rs.1,497 lakh versus Rs.2,365 lakh; profit before tax was Rs.5.32 lakh versus Rs.816.12 lakh.

• Net profit after tax was Rs.4.64 lakh; prior-period net income adjustments added Rs.70.93 lakh, while depreciation-adjusted profit before those adjustments was a loss of Rs.65.61 lakh.

• Power and fuel costs rose to Rs.5,741.08 lakh from Rs.5,505.16 lakh; interest expense was Rs.976.69 lakh versus Rs.983.81 lakh.

• Operating cash flow was Rs.893.12 lakh versus an outflow of Rs.268.13 lakh; cash and cash equivalents closed at Rs.293.81 lakh versus Rs.455.06 lakh.

Outlook and guidance

• A 36.7 MW diesel-generator installation was considered essential to reduce power costs and secure long-term competitiveness; an application was made to IDBI.

• Planned projects included converting the 200 TPD mercury-cell plant to membrane technology and expanding membrane-cell capacity from 60 TPD to 100 TPD.

• Electricity tariffs had increased from Rs.2.43 to Rs.2.87 per unit; a further 29-paise-per-unit increase, comprising tariff and fuel surcharge, took effect in June 1997.