NOCIL (NOCIL) Q4 06/07 earnings summary

Executive summary

• FY07 earnings weakened as dumping, lower realizations and higher input costs outweighed export-volume growth; turnover and profit declined YoY.

• Capacity expansion, new-product launches and the Vapi acquisition positioned operations for expected growth in global rubber-chemical demand.

Financial highlights

• Turnover including excise duty was Rs339.00cr vs Rs403.76cr; net sales after excise were Rs304.31cr vs Rs363.03cr.

• PBT was Rs35.25cr vs Rs67.07cr; PAT was Rs24.35cr vs Rs60.93cr.

• Operating profit before depreciation, interest, tax and exceptional items was Rs42.10cr vs Rs74.14cr.

• Production was 29,839 MT vs 30,922 MT; sales volume was broadly level YoY, with export volumes up and domestic volumes down.

• Operating cash flow was Rs35.69cr vs Rs25.66cr; investing activities used Rs33.42cr vs generating Rs7.91cr.

Outlook and guidance

• Outlook remained positive on global rubber-chemical demand; capacity expansion, new products and the Dahej site were expected to support market-share growth.

• Management expected to mobilize term loans to commission the Dahej greenfield facility; the site was intended to diversify raw-material sourcing and support scale economies.

• FY08 energy initiatives included a solid-fuel boiler expected to save Rs3cr annually, alongside pump, audit, solar and variable-frequency-drive projects.