Chambal Fertilizers and Chemicals

Excellent performance by the manufactured fertilizer division as well as the traded fertilizer division enabled Chambal Fertilizers and Chemicals to post excellent top-line growth of 25% to Rs 965.43 crore on a year-on-year basis. The subsidy on phosphatic and potassic fertilizers has been accounted for as per the nutrient based subsidy policy announced by the government of India with effect from 1^st April 2010. The Gadepan I fertilizer plant was under planned shutdown for 18 days during the month of April 2010.

The OPM was flat at 18.1% as a result the absolute operating profit rose 24% to Rs 174.39 crore. Lower other income resulted in the PBIDT increasing by 18% to Rs 184.69 crore on a year-on-year basis. After providing for finance charges the PBT before EO posted an impressive 21% growth to Rs 86.35 crore. The company made an EO gain of Rs 4.37 crore on the account on sale of 6240962 equity share of the associates Zuari Investments. The EO gain during the corresponding quarter of the previous year was similar. Thus the PBT after EO rose 19% to Rs 90.72 crore. After providing for tax expenses the bottom-line rose 16% to Rs 63.96 crore.

Performance for the quarter ended June 2010

The company's top-line posted excellent growth of 25% to Rs 965.43 crore on a year-on-year basis as both the manufactured fertilizer division as well as the traded fertilizer volume increased during the quarter under review. The manufactured fertilizer business which contributed 55% of the total revenue during the quarter increased 21% to Rs 526 crore, while the traded goods segment posted a revenue growth of 43% to Rs 285.71 crore. The shipping business was flat at Rs 65.75 crore while the textiles business rose 8% to Rs 73.99 crore. The subsidy on phosphatic and potassic fertilizers has been accounted for as per the nutrient based subsidy policy announced by the government of India with effect from 1^st April 2010. The Gadepan I fertilizer plant was under planned shutdown for 18 days during the month of April 2010.

The raw material cost, power & fuel cost and the employee cost was lower while the traded goods cost increased. The other operating expenditure during the quarter included Rs 1 crore on account of diminution in the value of fertilizer bonds, net mark-to-market loss of Rs 19.04 crore for the shipping division and Rs 41.18 lakh for the fertilizer division on the USD interest rate Swap transactions to convert floating rate loans to fixed rates. After accounting all this, the OPM was flat at 18.1% as a result the absolute operating profit rose 24% to Rs 174.39 crore.

However lower other income, which corrected by 34% to Rs 10.31 crore resulted in the PBIDT increasing by 18% to Rs 184.69 crore on a year-on-year basis. Although the depreciation allowance was flat the interest cost increased considerably, as a result the PBT before EO posted an impressive 21% growth to Rs 86.35 crore.

The company made an EO gain of Rs 4.37 crore on the account on sale of 6240962 equity share of the associates Zuari Investments. The EO gain during the corresponding quarter of the previous year was similar. Thus the PBT after EO rose 19% to Rs 90.72 crore. After providing for tax expenses the bottom-line rose 16% to Rs 63.96 crore.

Performance for the year ended March 2010-

Reduced volume of traded products besides steep reduction in price and low volume of Di-ammonia Phosphate (DAP) resulted in 22% dip in the standalone turnover of the company to Rs 3599.04 crore during the fiscal ended March 2010 as compared to the previous fiscal. Barring the textile division, all other major division posted fall in top-line during the year under review.

The manufactured fertilizer division contributed 63% to the total revenue of the company whereas the traded goods contributed 21% of the total revenue. The manufactured fertilizer sales fell by 6% to Rs 2240.78 crore, whereas the traded goods sales fell sharply by 50% to Rs 761.09 crore. Results for the year include (a) provision of Rs 14 crore on account of diminution in the value of Fertilizer bonds (b) net mark to market loss of Rs 13.12 crore for shipping division and Rs 58.55 lakh for fertilizer division of the company on USD interest Rate Swap Transactions to convert floating rate loans to fixed rates.

As a percentage of net adjusted sales the traded goods cost fell to 18.3% as compared to 33.5% during the previous year, although the raw material cost remained higher by 910 bps. Thus the overall operating cost reduced to 83.6% of adjusted sales as compared to 87% during the previous fiscal The OPM during the period as a result increased to 18.2% as compared to 12% during the previous year. The resultant operating profit increased 17% to Rs 654.92 crore.

Other income fell by 57% to Rs 42.29 crore. After providing for the interest cost and the depreciation allowance that fell by 30% and increased by 13% respectively, the PBT before EO posted a 15% growth to Rs 354.44 crore.

The company earned an EO of Rs 4.37 crore on account of gain on sale of 62, 40,962 equity shares in Zuari Investments as against an EO gain of Rs 9.61 crore during the previous fiscal. Thus the PBT after EO increased 13% to Rs 358.81 crore. After providing for tax expenses, the net profit increased 8% to Rs 249.05 crore.

The consolidated performance of the company during the fiscal ended March 2010 was disappointing. The top-line fell 26% to Rs 4148.69 crore, while the consolidated bottom-line fell 4% to Rs 217.22 crore.

The company's shipping division has entered into time charter contracts for three of its ships where charter hire comprises of fixed component and a profit sharing component, which is determined at the year end. Income on profit share component has been recognized based on best estimates of the performance achieved during the quarter, which may vary in subsequent quarters.

The promoter share holding as on June 2010 is 53.73%.

The scrip is currently trading at Rs 67 on the BSE.

Chambal Fertilizers: Results

 Chambal Fertilizers: Segment Results