Chambal Fertilizers

The net sales for Q3 FY12 has inclined by 32% to Rs 1796.61 crore. The sales of own manufactured goods increased by 18% to Rs 808.04 crore, traded goods by 58% to Rs 788.74 crore and shipping by 47% to Rs 103.1 crore while there was fall in sales of textile by 16% to Rs 83.83 crore. The OPM declined by 547 basis points to 11.4% due to increase in purchased of traded goods. The PBT before EO has declined by 27% to Rs 111.18 crore

For the quarter ended December 2011

The net sales inclined by 32% to Rs 1796.61 crore. The sales of own manufactured goods increased by 18% to Rs 808.04 crore, traded goods by 58% to Rs 788.74 crore and shipping by 47% to Rs 103.1 crore while there was fall in sales of textile by 16% to Rs 83.83 crore.

The OPM declined by 547 basis points to 11.4% due to increase in purchased of traded goods by 1820 basis points to 43.4% of adjusted net sales. Other expenditure includes provision for net mark to market (MTM) loss of Rs. 22.38 crore (for the quarter MTM gain of Rs 0.93 crore) and Rs 0.19 crore (for the quarter MTM gain Rs 0.24 crore) for shipping and fertiliser division of the company respectively, on USD interest rate swap transactions to convert floating rate loans to fixed rates. As a result, the operating profit declined by 11% to Rs 205.09 crore.

The other income has fallen by 29% to Rs 8.59 crore. The interest cost increased by 25% to Rs 28.92 crore while the depreciation has increased by 10% to Rs 73.57 crore. The PBT before EO has declined by 27% to Rs 111.18 crore.

There was an exceptional deferred tax of Rs 92.93 crore in the quarter. The company has ascertained deferred tax liability on the difference between the written down value of the fixed assets pertaining to the shipping division as per books of accounts and the Income Tax Act, 1961 as on April 1, 2011 amounting to Rs 185.86 crore. The deferred tax liability is being accounted for during last two quarters of the financial year 2011-12 and accordingly an amount of Rs 92.93 crore has been accounted in the current quarter. As a result, the PBT after EO was down by 88% to Rs 18.25 crore.

Tax outgo has decreased by 46% to Rs 23.86 crore. After considering prior period adjustment of Rs 4.36 crore, the loss at the bottom line is Rs 1.25 crore due to exceptional deferred tax.

The PBIT margin of own manufactured goods was down by 230 basis points to 14% thus leading to just 2% rise in PBIT to Rs 113.19 crore. The PBIT margin of traded goods was down by 50 basis points to 6.1% thus leading to 45% rise in PBIT to Rs 48.24 crore. The loss at PBIT level for shipping and textile stood at Rs 3.35 crore and 1.89 crore respectively.

For nine months ended December 2011

The net sales inclined by 19% to Rs 4603.3 crore. The sales of own manufactured goods increased by 21% to Rs 2268.96 crore, traded goods by 17% to Rs 1766.78 crore and shipping by 40% to Rs 290.49 crore while there was fall in sales of textile by 3% to Rs 246.07 crore.

The OPM declined by 347 basis points to 12.3% due to increase in purchased of traded goods by 400 basis points to 39.7% and other expenditure by 100 basis points to 13.9% of adjusted net sales. As a result, the operating profit declined by 7% to Rs 565.5 crore.

The other income has fallen by 9% to Rs 38.99 crore. The interest cost decreased by 3% to Rs 77.94 crore while the depreciation has increased by 4% to Rs 210.06 crore. The PBT before EO has declined by 14% to Rs 316.49 crore.

There was an exceptional deferred tax of Rs 92.93 crore. As a result, the PBT after EO was down by 40% to Rs 223.56 crore.

Tax outgo has decreased by 8% to Rs 106.18 crore. After considering prior period adjustment of Rs 36.72 crore, the net profit at the bottom line is down by 40% to Rs 154.1 crore.

The PBIT margin of own manufactured goods was down by 190 basis points to 14.8% thus leading to just 7% rise in PBIT to Rs 336.1 crore. The PBIT margin of traded goods was up by 130 basis points to 6.7% thus leading to 46% rise in PBIT to Rs 118.24 crore. The loss at PBIT level for shipping and textile stood at Rs 21.5 crore and 11.97 crore respectively.

Other Developments

The results for the period ended December 31, 2011 have been prepared on the basis of notified concession prices for urea under the New Pricing Scheme (NPS), further adjusted for input price escalation / de-escalation, as estimated on the basis of prescribed norms. The concession price of urea notified by the Government of India under the NPS-Stage ill effective for the period from October 1, 2006 to March 31, 2010, has been extended on provisional basis till further orders.

During the period, the subsidy on Phosphatic and Potassic fertilizers has been accounted for as per concession price notified by the Government of India from April 1, 2011.

During the quarter, the Shipping Division of the Company has opted out of Tonnage Tax Scheme under the Income Tax Act, 1961 and will be assessed under the normal tax regime w.e.f. April 01, 2011. The computation of current tax and deferred tax for the 9 months period ended December 31, 2011 has been done accordingly.

Valuation

The stock was trading at around Rs 77.2 at BSE on 18^th January 2012.

The promoter has pledged 11.93% of total shareholding of promoter & promoter group and 6.57% of the total share capital of the company.

The promoter holding in the company is at 55.1%.

Chambal Fertilizers: Standalone Results

Chambal Fertilizer: Standalone Segment Revenue