- Soda ash
demand continues to be healthy.
- Price increases
enable Company to absorb higher raw material
costs
- GCIP integration
process commences
- IMACID declares
dividend of 20%
- Babrala clocks
highest urea production ever; debottlenecking
progressing on schedule
- Tight phosphoric
acid supply impacts phosphatic fertiliser manufacturing
- Fresh Produce
business opens its first distribution centre
at Ludhiana
- Nanded Ethanol
plant construction begins;
Board of Directors recommend dividend of Rs
9 per equity share, Payout of 53.53 % (Excluding
the income from sale of shares)
FY08 Financial
Highlights
Standalone
Consolidated
-
PAT at Rs
964 cr; Normalised PAT at Rs 477 crore
Revenues at Rs 6,023 cr
-
Basic EPS:
Rs 43.51, Diluted EPS: Rs 38.52
Tata Chemicals
Limited, a leading manufacturer of chemicals,
fertilisers and food additives today announced
its audited financial results for the year ended
March 31, 2008. The Company is the second largest
manufacturer of soda ash and the third largest
producer of sodium bicarbonate in the world, apart
from being the leader in the Indian market. Tata
Chemicals also enjoys leadership in the Indian
edible salt market and is the most efficient manufacturer
of urea fertiliser in the country.
Commenting on the Company’s performance for
FY2008, Mr. Homi Khusrokhan, Managing Director,
Tata Chemicals, said, “This has been
an encouraging and eventful year for us. Our soda
ash business has performed very well despite floods
at Mithapur and operational difficulties at Magadi.
Our urea operations performed strongly with production
for the year under review at a record high. Erratic
availability of phosphoric acid however impacted
our phosphatic fertiliser operations. The new
initiatives have also taken off with the commissioning
of the first fresh produce collection and distribution
centre in Punjab and the Nanded bio-ethanol project.
The GCIP acquisition added a new dimension to
our soda ash business with access to a significantly
low cost natural resource and markets that were
earlier not available to us. I look forward to
further strengthened performance going forward.”
Note:
Consolidated financials indicated in this communication
are audited and primarily include those of Tata
Chemicals standalone entity, the Brunner Mond
Group acquired in December 2005 and the one third
stake acquisition in Indo Maroc Phosphore S.A.
(IMACID). The consolidated financials in this
communication do not include those of Global Chemicals
& Industrial Products (GCIP).
Normalised financials reported are adjusted to
exclude other income (and includes profit from
sale of investments) namely -
In FY2008 – Rs 487 crore (Profit on sale
of investments)
Rs 9 crore (Loss on Fertiliser Bonds)
In FY2007 – Rs 32 crore (Dividend from Tata
Industries)
The Board of Directors have recommended dividend
of 90% involving a total outgo of Rupees 247 Crore
and a payout ratio of 53.53% (Excluding the income
from sale of shares)
SEGMENTAL PERFORMANCE
A. CHEMICALS
- Domestic sales
amounted to Rs 1,586 crore for the year ended
March 31, 2008 & PBIT margins for the chemicals
business stood at 22% for the year
Soda ash
Performance perspective
- Tata Chemicals
continues to command a leadership position in
the domestic soda ash market. Sales volumes
(including exports) for soda ash for the year
ended March 2008 stood at 680 K tonnes.
- Higher input
costs, especially those of coal, coke &
limestone impacted production. Price increases
of soda ash on the back of strong demand, however
helped mitigate these threats
Consumer Products
- Tata Chemicals
continues to be the market leader in the domestic
edible salt market with a 51% share in the national
branded segment. Tata Salt’s current market
share is about 44%and about 7% comes from encouraging
sales of I-shakti.
- Tata Salt
was adjudged the 3rd most trusted brand by The
Economic Times
B.
FERTILISERS
- Revenues for
FY08 from the fertiliser business were Rs 2,506
crore & PBIT margin was 13% for the year
under review
- Babrala recorded
its highest urea production this year despite
natural gas supply interruptions
- Work on debottlenecking
of the Urea plant is progressing on schedule
and is expected to be completed by December
2008
- Input prices
continue to rise. Sulphur and rock phosphate
prices are currently above USD 800 pmt and USD
450 pmt respectively, translating to a ten fold
and three fold increase YOY respectively above
normal levels
- Unavailability
of sulphur has also impacted supply of phosphoric
acid thus putting pressure on DAP production
C. FOREIGN
SUBSIDIARIES AND JOINT VENTURES OVERVIEW
- High coke
and coal prices impacted manufacturing costs
adversely in Brunner Mond Europe. However the
increase in soda ash prices has helped contain
these increases
- The new 50,000
tonnes per year hi-tech sodium bicarbonate plant
in the Netherlands has commenced operations.
This plant is the first of its kind in the Netherlands
and has taken the Company's global sodium bicarbonate
production capacity to 200,000 tonnes per year.
The facility will mainly manufacture higher
value pharma grade sodium bicarbonate
- Rising costs
of fuel oil and power, increased cost of transportation
and political tension have hit operations at
Magadi
- Firm international
prices of phosphoric acid have enabled IMACID
to continue to perform strongly; declaring a
maiden 20%dividend. The Company is actively
exploring organic & inorganic growth opportunities
- With the firmness
in international fertilisers markets likely
to continue, it is unlikely that prices of phosphoric
acid will soften in the near future
GCIP Acquisition
- The Company
completed the acquisition of the soda ash business
of General Chemical Industrial Products Inc.
(GCIP), a US chemical company, for USD 1,005
million from Harbinger Capital Partners (the
majority shareholder)
- A significant
soda ash producer in the USA with a capacity
of 2.5 million TPA of natural soda ash, GCIP
has mining and manufacturing facilities located
at Green River Basin in Wyoming, USA
- The acquisition
enables Tata Chemicals access to an extremely
low cost natural resource and access to several
new markets
- The acquisition
was funded through debt & internal accruals.
Debt comprises USD 500 million raised via an
ECB and a bridge loan amounting to USD 350 million
at very attractive rates
D. NEW BUSINESSES
Fresh Produce Business
- The first
collection cum distribution centre at Melerkotla,
near Ludhiana was formally commissioned in May
2008. The response from the local farmer community
has been very encouraging
- The second
distribution centre will come up at Kalyan,
near Mumbai, land acquisition for which is currently
in progress
Bio-fuels
Business
- Civil construction
at site for the Ethanol project at Nanded has
commenced. Plant completion is expected by the
end of this year
- Land has been
acquired in Madurai for the setting up of a
bio diesel pilot plant
E. FINANCIAL
MANAGEMENT
- Total consolidated
debt as on March 31, 2008 stood at Rs 4,850
crore. Debt largely comprises the Rs 239 crore
low cost short term buyer’s credit for
the phosphatics business, the USD 50 million
(net of conversion of USD 100 million as on
March 31, 2008) Foreign Currency Commercial
Borrowing (FCCB) raised in January 2005, the
USD 125 million US Private Placement and the
USD 850 million debt raised for the GCIP acquisition
(USD 500 million was raised via an ECB and USD
350 million bridge loan by an SPV)
- USD 104 million
or 70% of the total FCCB holding has been converted
to equity as on date
F. AWARDS
The Company received the following awards during
the last quarter:
- British Safety
Council Award for Business Sustainability
- Dun &
Bradstreet American Express Corporate Awards
2007
- Corporate
Citizen of the Year Award from the Press Relation
Council of India (PRCI)
- Federation
of Gujarat Industries (FGI) Award for Excellence
in ‘Industrial Relations’
- RBNQA award
for performance excellence for the Haldia plant
For further
information contact:
P.K.Ghose
Tata Chemicals Ltd
Tel.: +91 22 6665 8282
Fax: +91 22 2285 1132
E-mail: pkghose@tatachemicals.com
Kirby Furtado
Vaishnavi Corporate Communications
Tel.: +91 22 6656 8787
Mobile: +91 98216 74905
E-mail: kirbyw@vccpl.com
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