NOCIL (NOCIL) Q4 05/06 earnings summary

Executive summary

• FY06 marks the transition to a standalone rubber chemicals business following the demerger of petrochemicals and plastic products operations; BIFR declared the business no longer sick in Nov. 2005.

• FY06 profit before tax was Rs 67.07 crore and profit after tax Rs 59.69 crore; reported comparisons are limited because the prior period covered 18 months and included demerger effects.

• The Board recommended a 5% dividend on equity capital.

Financial highlights

• Sales including excise duty were Rs 403.76 crore; sales net of excise were Rs 363.03 crore. Total turnover was Rs 398 crore, versus Rs 440 crore in the prior 18-month period.

• Operating profit before depreciation, interest, tax and exceptional items was Rs 73.83 crore; depreciation Rs 6.07 crore and interest Rs 0.69 crore.

• PBT was Rs 67.07 crore and PAT Rs 59.69 crore; tax provisions included current tax, deferred tax and fringe benefit tax, partly offset by Rs 5.70 crore MAT credit entitlement.

• Rubber chemicals production was 30,922 MT; finished-product production was 5% higher than in the corresponding previous period, although the reporting periods differ in length.

Outlook and guidance

• Near-term rubber chemicals growth was expected on rising demand for rubber products, supported by global economic strength and infrastructure investment in India.

• Planned growth actions included debottlenecking key products, technical development, new-product launches and additional manufacturing facilities at an alternate site.

• Management expected newly approved export products to begin contributing soon and said customer approvals and annual supply contracts were secured.