PCBL Chemical (PCBL) Q4 04/05 earnings summary

Executive summary

• 18-month period ended 31 Mar 2005: carbon black production rose 34%; domestic market share grew nearly 16% and export market share 138%, while margins faced feedstock cost pressure.

• Baroda expansion added 70,000 MT of capacity; a 12 MW cogeneration plant began operating on 30 Mar 2005, using process waste gases to generate power.

Financial highlights

• Net carbon black sales were Rs 912.07 crore; PBT was Rs 18.23 crore and PAT Rs 12.36 crore for 18 months, versus Rs 475.11 crore, Rs 24.34 crore and Rs 18.60 crore, respectively, for the prior 12 months; periods are not comparable.

• PBDIT was Rs 55.60 crore after bad debts of Rs 12.23 crore; interest was Rs 20.56 crore and depreciation Rs 25.53 crore for the 18-month period.

• Board recommended a 15% dividend, or Rs 1.50 per equity share; proposed dividend including tax totaled Rs 3.04 crore.

Outlook and guidance

• Domestic carbon black demand was expected to grow 8%; strong Asia-Pacific demand, led by China, was expected to support exports and expanded capacity utilization.

• High crude oil and feedstock prices were expected to pressure margins; selling-price increases and ongoing cost reduction were planned to mitigate the impact.

• A 30 MW cogeneration plant at Durgapur was planned to lower power costs and sell surplus power; Baroda power sales were expected to support profitability.