Mangalore Refinery and Petrochemicals (500109) Q4 05/06 earnings summary

Executive summary

• FY 2005-06 turnover reached a record Rs. 28,242.86 crore; net profit fell to Rs. 371.61 crore from Rs. 879.76 crore, mainly due to product discounts and lower domestic offtake by PSU oil marketers.

• Refinery throughput reached a record 12.12 MMT, equivalent to 125% capacity utilisation, alongside record export earnings of Rs. 11,917 crore.

Financial highlights

• Turnover rose 36.49% YoY to Rs. 28,242.86 crore; net profit declined to Rs. 371.61 crore from Rs. 879.76 crore.

• PBT was Rs. 622.58 crore versus Rs. 1,460.87 crore; profit before interest, depreciation and tax was Rs. 1,190.89 crore versus Rs. 2,099.16 crore.

• Exports rose 92.49% YoY to Rs. 11,917.19 crore and represented 51% of product despatches by volume.

• Board recommended a 7% equity dividend, down from 10% in FY 2004-05; dividend and tax on dividend totalled Rs. 139.91 crore.

Outlook and guidance

• Isomerisation and mixed-xylene projects were progressing on schedule, with commissioning expected in Q3 FY 2006-07.

• Refinery expansion to 15 MMTPA from 9.69 MMTPA was expected to take 48 months, targeting completion by June 2010; higher distillate yield is expected to improve margins.

• Mauritius export contract covers about 1.03 MMT of products over one year from August 2006; a separate contract covers about 600 TMT of HSD to ENOC from June to December 2006.

• A 7.5 MMTPA export-oriented Kakinada refinery remained under feasibility study; Rajasthan refinery economics depended on crude pricing and state fiscal incentives.