Carborundum Universal

Sales up 6%, net down 16%

Aug 22, 2019 02:08 IST capital market

Carborundum Universal (Cumi), the abrasive major has registered 6% increase in consolidated sales for the quarter ended June 2019 to Rs 671.40 crore. However with operating profit margin contract by 270 bps the operating profit declined by 11% to Rs 95.24 crore. Hit further by lower other income the PBIDT was down by 15% to Rs 100.14 crore. Strained further by higher interest cost (up 2% to Rs 1.93 crore) and lower depreciation (down 6% to Rs 26.40 crore) the PBT was down by 18% to Rs 71.81 crore. After accounting for lower share of profit from associates (down 9% to Rs 5.90 crore) the PBT after share of profit from associates was down by 18% to Rs 77.71 crore. With tax rate stand higher (at 36.6% up from 33.3%) the PAT was down by 21% to Rs 51.40 crore. However as minority interest being share of loss of Rs 1.37 crore (compared to share of profit of Rs 2.43 crore in corresponding previous period) the net profit was down by 16% to Rs 52.77 crore.
  • Sale excluding other operating income was up by 6% to Rs 663.58 crore. The Upside in revenue is largely due to higher ceramics and electro-minerals (EM) sales. Segment revenue of Abrasives was down by marginal 1% to Rs 259.37 crore (or 37% of sales) due to low off take in the market. While standalone abrasive revenue was up by 1% to Rs 213.74 crore, the segment revenue of subsidiaries (consolidated sales figure less standalone sales) was down by 8% to Rs 45.63 crore. Contrarily the consolidated segment revenue of Electro Minerals (EM) was up by 11% to Rs 264.15 despite 2% fall in standalone EM revenue to Rs 104.64 crore and that is largely due to 21% growth in EM Segment revenue of subsidiaries to Rs 159.51 crore. However the consolidated segment revenue of ceramics was up by 14% to Rs 165.29 crore with standalone ceramics segment revenue up by 17% (to Rs 138.22 crore) and subsidiaries up by modest 1% (to Rs 27.07 crore). Segment revenue of others was up by 3% to Rs 17.10 crore.
  • Consolidated EBIT was down by 14% to Rs 84.53 crore and the downside at EBIT was largely due to lower segment profit of abrasives as well as EM. Consolidated segment profit of abrasives was lower by 11% to Rs 28.27 crore with its segment margin contract by 120 bps to 10.9%. While standalone segment profit of abrasives was down by 3% to Rs 27.81 crore that of subsidiaries was down by 85% to Rs 0.46 crore. Despite higher sales the consolidated segment profit of EM was lower by 30% to Rs 24.42 crore hit by 540 bps fall in segment margin to 9.2% largely due to lower price realization and losses in Foskor Zirconia. EM segment profit of both standalone and subsidiaries was lower by 70% (to Rs 3.19 crore) and 13% (to Rs 21.23 crore). However segment profit of ceramics was up by 3% to Rs 29.80 crore powered largely by higher sales as its segment margin contract by 200 bps to 18%. While standalone segment profit of ceramics was up by 19% to Rs 24.89 crore that of subsidiaries was down by 40% to Rs 4.91 crore.
  • Operating profit margin contracted by 270 bps to 14.2% and that can be attributed to sharp rise in material cost, cost of traded goods and staff cost. Material cost as proportion to sales net of stocks was up by 150 bps to 32.8%. Similarly the power & fuel cost and OE was up by 30 bps (to 14%) and 180 bps (to 23.2%) respectively. However cost of traded goods was down by 20 bps to 3.7%. Similarly the staff cost was down by 60 bps to 12.3%.
  • The step down subsidiary M/s.Foskor Zirconia Ply Limited, South Africa (FZL] has incurred a loss of Rs 8.20 crore for the quarter ended June 2019, out of this Rs 4.18 crore has been considered in the Group consolidated financials, being share of the Parent.

Yearly performance

Operating income net of excise was higher by 14% to Rs 2688.90 crore. But with OPM decline to 16.3% from 16.8% a year ago, the growth at operating profit was restricted to 10% to Rs 438.29 crore. After accounting for higher other income (up 19% to Rs 27.30 crore) and lower interest and depreciation cost as % of operating profit, the growth at PBT was 14% to Rs 348.84 crore.

The tax rate was higher at 34.7% compared to 33.2% in the corresponding previous period. And thus the growth at PAT was restricted marginally and stood at 11% to Rs 227.66 crore. After accounting for higher profit from associates and minority interest the net profit was up by 15% to Rs 247.68 crore. With other comprehensive expense attributable to owners stand higher at 34.39 crore (a swing of Rs 36.23 crore from an income of Rs 1.84 crore in corresponding previous period) the total comprehensive income attributable to owners was lower at 2% to Rs 213.29 crore.

The step down subsidiary M/s.Foskor Zirconia Ply Limited, South Africa (FZL] has incurred a loss of Rs 24.70 crore for the Financial year 2018-19, out of this Rs 12.60 crore has been considered in the Group consolidated financials, being share of the Parent. The Board of FZL is monitoring the business performance and will initiate suitable measures in due course. No adjustments are necessary to these financial statements in this regard.

Carborundum Universal: Consolidated Results

 

1906 (3) 1806 (3) Var. (%) 1903 (12) 1803 (12) Var. (%)
Sales 671.40 634.34 6 2688.90 2367.76 14
OPM (%) 14.2 16.9 16.3 16.8
OP 95.24 107.46 -11 438.29 398.64 10
Other inc. 4.90 10.48 -53 27.30 22.92 19
PBIDT 100.14 117.94 -15 465.59 421.56 10
Interest 1.93 1.90 2 8.48 8.61 -2
PBDT 98.21 116.04 -15 457.11 412.95 11
Dep. 26.40 27.98 -6 108.27 105.99 2
PBT 71.81 88.06 -18 348.84 306.96 14
Share of Profit/(Loss) from Associates 5.90 6.51 -9 19.94 14.66 36
PBT before EO 77.71 94.57 -18 368.78 321.62 15
EO Exp 0.00 0.00 0.00 0.00
PBT after EO 77.71 94.57 -18 368.78 321.62 15
Taxation 26.85 30.83 -13 123.31 111.47 11
Deferred Tax -0.54 -1.55 -65 -2.13 -9.44 -77
PAT 51.40 65.29 -21 247.60 219.59 13
Minority Interest 1.37 -2.43 -156 0.08 -3.99 -102
Net profit 52.77 62.86 -16 247.68 215.60 15
EPS (Rs)* # # 13.1 11.4
* EPS is on current equity of Rs 18.9 crore, Face value of Rs 1
# EPS is not annualised due to seasonality of business
Figures in Rs crore
Source: Capitaline Corporate Database

Carborundum Universal: Consolidated Segment Results

 

Particulars 1906 (3) 1806 (3) Var. (%) % to total 1903 (12) 1803 (12) Var.(%) % to total
Sales
Abrasives 259.37 262.20 -1 37 1124.35 1036.35 8 40
Ceramics 165.29 145.10 14 23 604.40 506.75 19 22
Electrominerals 264.15 238.92 11 37 1018.54 888.65 15 36
Others 17.10 16.65 3 2 63.86 63.98 0 2
Total 705.91 662.87 6 100 2811.15 2495.73 13 100
Less Inter segment revenue 42.33 37.08 14 155.54 137.86 13
Net sales 663.58 625.79 6 2655.61 2357.87 13
PBIT
Abrasives 28.27 31.73 -11 33 140.15 132.47 6 37
Ceramics 29.80 29.06 3 35 108.16 75.86 43 28
Electrominerals 24.42 34.98 -30 29 127.91 126.95 1 34
Others 2.04 2.57 -21 2 5.02 10.04 -50 1
Total 84.53 98.34 -14 100 381.24 345.32 10 100
Less: Interest (net) 1.93 1.90 2 8.48 8.61 -2
Less: Others Un-allocable Exp/Income (net) 10.79 8.38 29 23.92 29.75 -20
Add: EO
PBT 71.81 88.06 -18 348.84 306.96 14
Sebment Assets
Abrasives 681.75 661.71 3 29 655.28 639.02 3 29
Ceramics 464.07 445.24 4 20 457.28 438.18 4 20
Electrominerals 730.25 671.28 9 31 707.97 653.13 8 32
Others 449.55 397.33 13 19 411.50 368.19 12 18
Total 2325.62 2175.56 7 81 2232.03 2098.52 6 82
Segment Liabilities
Abrasives 131.27 127.51 3 27 137.12 136.51 0 30
Ceramics 55.13 60.58 -9 11 52.28 47.97 9 11
Electrominerals 108.71 96.55 13 22 101.78 89.93 13 22
Others 199.14 222.03 -10 40 164.44 198.29 -17 36
Total 494.25 506.67 -2 60 455.62 472.70 -4 64
Note: Figures in Rs crore
Source: Capitaline 2000

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