NOCIL (NOCIL) Q4 02/03 earnings summary

Executive summary

• 18-month period ended 30 Sep 2003 marked by severe losses, fully eroded net worth and closure of the unviable Petrochemicals Division; restructuring aimed to retain Rubber Chemicals operations.

• Understanding reached with Sunbright Cement Agencies to take over Petrochemicals assets and the Plastic Products business after demerger; completion remained subject to approvals.

Financial highlights

• Turnover Rs 452 crore for 18 months vs Rs 738 crore in FY2001-02; comparison is not like-for-like, and Petrochemicals operated for only 15 days.

• Net sales, excluding excise, Rs 39,917.83 lakh; loss before tax Rs 35,528.68 lakh and loss after tax Rs 35,574.88 lakh for the 18-month period.

• Adjusted for prior-year tax provision shortfall of Rs 925.82 lakh, loss for EPS calculation was Rs 36,500.70 lakh; EPS was -Rs 29.77 vs -Rs 7.41 in FY2001-02.

• Modernisation-related capital work-in-progress of Rs 24,932.57 lakh was expensed after the project was abandoned, materially increasing the period loss.

Outlook and guidance

• Rubber Chemicals volumes were expected to rise as demand improved; selective product prices had stabilised and were expected to increase, supporting potential margin recovery.

• Global capacity restructuring and exits by marginal producers were expected to improve supply-demand balance; Asia-Pacific demand was identified as a growth opportunity.

• Expansion of Rubber Chemicals was deferred due to liquidity constraints; process-efficiency and cost-reduction initiatives continued.