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BASF India

Capital Market/ 11:41 , Apr 30, 2014

Functional Material segment disappoints

For the quarter ended March 2014, net sales increased by 30% to Rs 1068.71 crore. OPM stood at 3% against 4.8% resulting a fall at OP level by 18%. Functional Material and solution segment reported a loss at PBIT level of Rs 8.56 crore as compared to a profit of Rs 10.60 crore at PBIT level, which hurt the overall margins of the company. Higher other income up by 67% could not offset the higher interest and depreciation costs, up by 27% and 16% respectively, thus resulting a 49% fall in PBT. After providing total tax of Rs 3.46 crore, down by 46%, PAT for the Mar'14 quarter was down by 51% to Rs 6.56 crore.

Performance for the quarter ended March 2014

For the quarter ended Mar'14, net sales were up by 30% to Rs 1068.71 crore. OPM was down by 180 bps to 3%, thus resulting in a 18% fall in OP to Rs 31.95 crore. Other income was up by 67% to Rs 3.45 crore. Interest costs and depreciation costs were up by 27% and 16% respectively to Rs 6.29 crore and Rs 19.09 crore. After providing total tax of Rs 3.46 crore, down by 46% YoY, PAT for the Mar'14 quarter stood at Rs 6.56 crore, down by 51% YoY.

Segmental updates for quarter ended Mar'14

Agriculture Solutions

The Agricultural Solutions business includes agrochemicals like insecticides, herbicides, fungicides and specialties. During the March 2014 quarter, net sales of Agricultural solutions segment, which constitute about 12% of total sales, grew by 42% YoY. At PBIT level, the segment reported a loss of Rs 3.39 crore for Mar'14 quarter as compared to loss of Rs 6.79 crore for Mar'13 quarter.

Performance Products

The Performance Products business includes performance chemicals, dispersions & pigments, care chemicals, nutrition and health products and paper chemicals. This business caters to the requirements of a wide spectrum of industries including textiles, leather, plastics & coatings, detergent formulators, pharmaceuticals, automobile and oil.

The segment which contribute about 42% of total sales, grew by about 28% to Rs 446.70 crore for Mar'14 quarter. At PBIT level, the segment reported a 59% growth on YoY basis and stood at Rs 38.01 crore. PBIT margin for Mar'14 quarter stood at 8.5%.

Chemicals

The company's Chemicals business includes intermediates, inorganics, petrochemicals and other process chemicals. The chemicals supplied by the company cater to the requirement of a wide range of user industries including coatings, life sciences, construction additives, food and feed, pharmaceuticals, agrochemicals, plastics and fibers, process chemicals and intermediates.

During the quarter, net sales for the segment, which contribute about 1% of total sales, grew by about 13% to Rs 14.32 crore. The segment reported PBIT of Rs 4.14 crore, up by 13% YoY. PBIT margin for Mar'14 quarter stood at 28.9% as compared to PBIT margin of 28.8% for Mar'13 quarter.

Functional Materials & Solutions

The company has reorganized its segment structure with effect from 1 April 2013 to better align to the market needs. Accordingly, the plastic segment has ceased to exist. Functional solution segment has now been renamed as functional material and solutions. This segment includes Styropor, part of Engineering Plastics and part of Polyurethane which were earlier in Plastic Segment. The Functional Solutions business of the company comprises of the Coatings & Construction Chemicals and Process Catalysts & Technology businesses.

During Mar'14 quarter, the segment which contribute about 43% of total sales, grew by about 30% YoY to Rs 463.57 crore. However, at PBIT level, the Functional Materials & Solutions segment reported a loss of Rs 8.56 crore as compared to a profit of Rs 10.60 crore for Mar'13 quarter.

Performance for the year ended Mar 2014

For the year ended Mar'14, net sales of the company grew by 12% to Rs 4429.89 crore. Net sales from Performance products segment grew by 19%, Agriculture segment grew by 13% to Rs 1044.79 crore, Functional Materials and Solutions grew by 9% while the chemical segment de grew by 30% to Rs 61.79 crore. OPM was flat at 6.4% resulting a 13% rise in OP to Rs 284.19 crore. Other income was up by 100% to Rs 7.83 crore. After a fall of 6% in interest costs to Rs 16.13 crore and a increase of 18% of depreciation costs to Rs 71.10 crore, PBT was up by 15% to Rs 204.79 crore. There was an EO expense of Rs 10.43 crore largely due to VRS of workforce as compared to an EO expense of Rs 9.54 crore for 12 months ended Mar'13. Thus PBT after EO stood at Rs 194.36 crore, up by 15% YoY. After paying total tax of Rs 66.49 crore, up by 21% YoY, PAT for 12 months ended Mar'14 stood at Rs 127.87 crore, up by 12% YoY.

Pursuant to the notification dated 29th December 2011 issued by the Ministry of Corporate Affairs amending the Accounting Standard 11, the Company has exercised the option in terms of Para 46A inserted in the Standard for long term foreign currency monetary assets and liabilities. Consequently an amount of Rs 35.44 crore is taken to capital work in progress/fixed assets as at 31st March 2014.

Promoters hold 73.3% of total share capital in the company and none of them are pledged.

The share price trades at Rs 605.

The Directors have recommended a dividend of Rs. 4/- per equity share of Rs. 10/- each (i.e. 40%) for the financial year ended March 31, 2014

BASF: Results

 

0314(03)0313(03)Var. (%)1403 (12)1303 (12)Var. (%)
Sales1068.71820.90304429.893940.6312
OPM (%)3.04.86.46.4
OP31.9539.13-18284.19251.9513
Other inc.3.452.07677.833.92100
PBIDT35.4041.20-14292.02255.8714
Interest6.294.942716.1317.12-6
PBDT29.1136.26-20275.89238.7516
Dep.19.0916.491671.1060.1818
PBT10.0219.77-49204.79178.5715
EO0.000.00010.439.549
PBT after EO10.0219.77-49194.36169.0315
Total Tax3.466.45-4666.4954.9521
PAT6.5613.32-51127.87114.0812
EPS (Rs) *##31.227.8
  * On current equity of Rs 43.29 crore; Face value Rs 10 each
#EPS can not be annualised due to seasonality in business
Figures in Rs crore
(P): Projections
Source: Capitaline Databases

BASF: Segment results

 

Segments1403(03)1303(03)Var. (%)% to Total1403(12)1303(12)Var. (%)% to Total
Sales
Agriculture Solutions126.2388.6242121044.79922.941324
Performance Products446.7348.3928421682.481417.171938
Chemicals14.3212.6913161.7988.82-301
Functional Materials & Solutions463.57357.0830431583.141450.34936
Others17.8914.1227257.6961.36-61
TOTAL1068.71820.90301004429.893940.6312100
Less: intersegment sales0000
Add: Unallocable sales0000
Net Sales1068.71820.904429.893940.63
PBIT
Agriculture Solutions-3.39-6.79-50-10142.7176.948553
Performance Products38.0123.8759116141.59115.992253
Chemicals4.143.65131323.5829.97-219
Functional Materials & Solutions-8.5610.60PL-26-47.9419.89PL-18
Others2.531.408188.713.551453
TOTAL32.7332.730100268.65246.349100
Less interest6.294.9416.1317.12
Less unallocable expenditure net of inc.16.428.0247.7350.65
Less unallocable EO
PBT before EO10.0219.77204.79178.57
EO0010.439.54
PBT10.0219.77194.36169.03
Capital Employed
Agriculture Solutions320.77269.485015320.77269.485015
Performance Products579.17548.41548579.17548.41548
Chemicals88.1334.87-30388.1334.87-303
Functional Materials & Solutions480.29320.081-465480.29320.081-465
Others41.6221.56129341.6221.561293
Add: Unallocable-259.81-51.85-8-8-259.81-51.85-8-8
TOTAL1250.171142.5510-4041250.171142.551010
Figures in Rs crore
Source: Capitaline Databases

 



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