Tata Chemicals Capital expenditure plan for FY 2010 is Rs 250 crore

June 4, 2009 · Author: · Category: conference call 

Highlights-

  • The consolidated top-line of the company for the full year ended March 2009 more than doubled to Rs 12,257.66 crore mainly backed by the record growth in sale of urea during the year under review.
  • During the year the company incurred a notional forex loss of Rs 92.31 crore on account of notional exchange loss or mark-to-market restatement (under AS-11) of foreign currency borrowings and also during the year the company incurred an EO loss of Rs 234.19 crore on account of actuarial deficit in overseas pension liability and asset impairment loss of Brunner Mond.
  • Loss on sale of fertilizer bonds and the mark-to market loss on the outstanding bonds was Rs 78.03 crore.
  • The PBT after EO fell by 22% to Rs 917.31 crore during the year ended March 2009, whereas the net profit of the company after minority interest of Rs 111.71 crore fell by 33% to Rs 648.09 crore during the year ended March 2009.
  • The company’s subsidiary viz Brunner Mond, IMACID and GCIP posted decent growth during the year under review.
  • Brunner Mond sales increased to Rs 2,079 crore during the year ended March 2009, whereas IMACID posted a sales of Rs 868 crore during the same period. The sales from GCIP was Rs 1323 crore.
  • Brunner sales were higher due to higher volumes and price increases that was initiated during the previous 2 quarters. Prices in Europe are presently in the region of USD 240 per metric tonnes.
  • However increased imports from China into South East Asia has considerably impacted Magadi’s performance. Chinese imports into Latin America have impacted GCIP’s exports to these regions.
  • In the domestic market the demand has remained strong on the back of traction of the detergents and chemicals segments. The soda ash prices in the domestic market corrected by around Rs 500 per metric tonne and the spot price currently is in the range of Rs 10,000 to 11,000 per metric tonnes.
  • Sales volumes (including exports) for soda ash at Mithapur for the quarter ended 31 March 2009 stood at 695,000 tonnes.
  • The global soda ash industry’s capacity utilization has fallen to 75% due to weakening demand during the past few months. The prices have also fallen and are currently in the range of USD 160-175 FOB China. The strong Chinese position in the global soda ash market is a major competitive concern.
  • The demand in UK and US are seen stabilizing; however the rest of Europe is witnessing a decline in demand.
  • The reintroduction of 9% export incentive for Chinese producers by the Chinese government has increased their production besides making their produce cheaper in the global market.
  • However the 20% safeguard duty for the next 6 months on Soda Ash imposed by the Government of India has to an extent protected the domestic market.
  • Urea production at the Babrala plant has stabilized at over 3,500 tonnes per day levels. The previous quarter saw the highest ever urea sales on the back of improved availability after debottlenecking the plant.
  • The company received Rs 4,264 crore total subsidy from the government during the year ended March 2009. Out this total subsidy the cash subsidy was Rs 3,245 crore whereas the subsidy in the form of bonds was Rs. 1,019 crore. Thus the outstanding subsidy as on 31 March 2009 was Rs. 874 crore.
  • Feedstock for the 30,000 litres per day Ethanol plant is being sourced and production is expected to begin soon. Trial cultivations of Jatropha for the Bio-diesel operations are continuing smoothly.
  • Tata Salt continues at number one position with market share of about 44%. Tata Salt Lite has become the market leader in the low sodium salt category within the first year of its launch.
  • The Nitrogenous fertilizer production by the company was 1.02 million metric tonnes whereas the sales during the year were 1.07 million metric tonnes during the year ended March 2009.
  • The phosphatic fertilizer production was 0.56 million metric tonnes during the year ended March 2009 as compared to 0.68 million metric tonnes during the previous fiscal. The sales during the year however were 0.58 million metric tonnes during the year under review.
  • DAP consumption in India increased considerably, however continued high phosphoric acid prices may render manufacture of DAP unviable. DAP prices currently has stabilized at around USD 330 per metric tonnes.
  • The average phosphoric acid price for the company during the 4th quarter was USD 760 per metric tonnes and the current price has fallen to USD 630 per metric tonnes.
  • The total cash in the book including Rs 446 crore fertilizer bond is Rs 1452 crore as on March 2009.
  • The consolidated gross debt as on March 2009 was Rs 6,283 crore. This comprises borrowings of USD 475 million taken on the Tata Chemicals balance sheet and a loan of USD 300 million taken on the GCIP balance sheet.
  • The payment of USD 475 million loan in the company’s B/S will begin in June 2012 while the USD 300 million loan in GCIP’s B/S has begun in February 2009.
  • The debt after deducting cash, value of investments and fertilizer bonds as on March 2009 was Rs. 4,831 crore.
  • The consolidated inventory turnover day of the company was around 38 days, whereas the debtor’s turnover day was 49 days.
  • The company has planned a capital expenditure of Rs 250 crore during the current fiscal. Out of this Rs 50 crore would go in setting up a customized fertilizer plant at Babrala in the northern state of Uttar Pradesh, and the rest in normal maintenance of assets.
  • The capex earlier planned for FY 2010 was Rs 500 crore, which was lowered citing current economic turmoil.
  • The company declared a final dividend of 90% for the financial year ended March 2009.

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