PCBL Chemical (PCBL) Q4 05/06 earnings summary

Executive summary

• FY06 turnover was ₹82,550.92 lakh; loss before tax was ₹1,869.61 lakh and net loss ₹1,507.24 lakh, versus profit after tax of ₹1,236.16 lakh in the prior 18-month period.

• Carbon Black sales volume rose 11% and sales value 19% on an annualized basis, but higher feedstock costs and foreign-exchange movements eroded profitability.

• No dividend was recommended because of the year’s loss.

Financial highlights

• Carbon Black sales were ₹81,725.09 lakh and power sales ₹825.83 lakh; other income was ₹177.01 lakh.

• PBDIT was ₹3,243 lakh, compared with ₹6,987 lakh in the prior 18-month period; interest was ₹3,064.97 lakh.

• Basic and diluted EPS were both a loss of ₹8.49, versus earnings of ₹6.96 in the prior 18-month period.

• Raw-material cost rose to 70% of sales from 60%, as feedstock prices and volatility increased.

Outlook and guidance

• Management expected a turnaround, citing price increases, cost reduction, operational-efficiency measures and improved power sales.

• Demand was expected to benefit from Indian road and infrastructure projects, automobile growth and expanding tyre exports; slower carbon-black capacity additions were also viewed favorably.

• Further carbon-black price increases were planned to catch up with feedstock inflation, subject to domestic and international market conditions.