Lords Chloro Alkali (500284) Q4 98/99 earnings summary

Executive summary

• 15-month FY ended 30 Jun 1999 reported sales and other income of Rs 8,480.81 lacs and a net loss of Rs 4,456.89 lacs; no dividend recommended.

• Net worth was fully eroded; the business was referred to BIFR as a sick industrial company and accounts remained prepared on a going-concern basis.

• Operations were hit by power interruptions and disconnection, low production, falling chlor-alkali prices and excess industry capacity.

Financial highlights

• Sales and other income were Rs 8,480.81 lacs for 15 months versus Rs 13,351.86 lacs for 12 months; periods are not comparable.

• Net loss was Rs 4,456.89 lacs versus Rs 2,674.15 lacs in the prior 12 months; loss before tax was also Rs 4,456.89 lacs.

• Operating loss before interest and depreciation was Rs 1,366 lacs versus Rs 521 lacs; gross loss was Rs 3,491 lacs versus Rs 1,776 lacs.

• Interest expense reached Rs 2,125.84 lacs versus Rs 1,254.58 lacs; depreciation was Rs 735.25 lacs, excluding Rs 0.89 lacs transferred from revaluation reserve.

• Net prior-period expenses were Rs 230.14 lacs; an extraordinary electricity-duty item of Rs 304.97 lacs was charged in the income statement.

Outlook and guidance

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

• IDBI financial assistance was being pursued for captive DG sets to reduce power costs and secure reliable supply.

• Management cited measures to improve financing, profitability and competitive strength, while seeking to retain its leading position in the north zone.