Lords Chloro Alkali (500284) Q4 97/98 earnings summary

Executive summary

• Production rose 4% to 70,653 MT, but steeply lower product prices, higher power costs and financing charges drove a reported net loss of Rs. 2,674.15 lacs for FY1997-98.

• Directors recommended no dividend; operating and financing pressures weighed on results despite higher output and Rs. 546 lacs in export turnover.

Financial highlights

• Sales and other income were Rs. 13,351.90 lacs, down from Rs. 14,952.39 lacs in FY1996-97.

• Operating loss before interest and depreciation was Rs. 521 lacs, versus operating profit of Rs. 1,497 lacs; gross loss was Rs. 1,776 lacs, versus gross profit of Rs. 521 lacs.

• Reported loss after depreciation was Rs. 2,364.86 lacs; FY pretax and net loss were Rs. 2,674.15 lacs, including a Rs. 304.97 lacs extraordinary electricity-duty item.

• Interest expense increased to Rs. 1,254.58 lacs from Rs. 976.69 lacs; direct manufacturing expenses rose to Rs. 9,250.49 lacs from Rs. 8,582.53 lacs.

• No dividend was recommended in view of the loss; export turnover was Rs. 546 lacs, with products shipped to 28 countries.

Outlook and guidance

• Planned competitiveness measures include 36.7 MW captive DG sets, conversion of the existing 200 TPD mercury-cell plant to membrane technology, and membrane-cell capacity expansion from 60 to 100 TPD.

• Financial assistance for captive DG sets was being pursued with IDBI to reduce power costs and address power cuts and tariff increases.

• Membrane-cell caustic soda capacity enhancement was in progress with Asahi Chemical Industries Ltd.