Mangalore Refinery and Petrochemicals (500109) Q4 01/02 earnings summary

Executive summary

• FY ended Mar. 31, 2002: turnover rose to Rs.5,385.50 crore from Rs.2,883.59 crore; net loss was Rs.492.48 crore, with profitability pressured by interest, depreciation, low refining margins and low capacity utilisation.

• Expansion to 9 MMTPA began commercial production on Apr. 10, 2001; crude throughput reached 5.328 MMT, and the refinery recorded its highest monthly throughput, 679,112 tonnes, in Mar. 2002.

Financial highlights

• Revenue from operations was Rs.5,385.50 crore vs. Rs.2,883.59 crore; net sales increased 86.8% on a comparable basis.

• Profit before interest, depreciation and tax was Rs.287.83 crore vs. Rs.144.47 crore; interest and finance charges rose to Rs.672.29 crore from Rs.237.83 crore.

• Loss before tax and extraordinary items was Rs.778.91 crore; depreciation and amortisation was Rs.363.35 crore, and net loss was Rs.492.48 crore vs. Rs.185.05 crore.

• Deferred tax credit of Rs.286.46 crore reduced the reported loss; EPS was negative Rs.6.20 vs. negative Rs.2.33.

• Product exports were Rs.265 crore; direct sales of free-trade products including bitumen, fuel oil and naphtha were Rs.360 crore.

Outlook and guidance

• Financial restructuring was in progress to reduce debt and interest burden; management was seeking an investor able to contribute substantial equity, with revival expected after restructuring.

• Mangalore-Hassan-Bangalore pipeline phase 1, a 367-km project costing Rs.667 crore, was expected to begin product transportation by Dec. 2002, improving access to hinterland markets.

• Direct marketing of major products remained under consideration; establishing retail infrastructure would require substantial capital, much of it equity-funded.

• Energy-conservation measures already implemented were estimated to save Rs.10.11 crore annually at full load; proposed or ongoing schemes were estimated to save Rs.2.07 crore annually at full load.