Chennai, 5 February 2013: The Board of Directors met today and approved the results for the quarter ended 31st Dec 2012.
Consolidated Q3 financial performance
Consolidated net sales dropped by 9.5% to 444 crores from 490 crores, on a quarter on quarter basis. PBIT (excluding exceptional income) dropped by 72.6% from 78 crores in last quarter similar period to 21 crores in the current quarter.
On a sequential basis, net sales dropped by 15% and PBIT (excluding exceptional income) dropped by 66%.
The drop in sales on quarter on quarter basis and sequential basis were largely due to lower performance by Electro minerals division. The division witnessed drop in volumes in silicon carbide business in Russia and India. South African subsidiary reported the lowest volumes ever, owing to deferment of orders by customers on the hope of expected drop in raw material prices. Sales also de-grew for Abrasives and Ceramics segment, both on quarter on quarter basis and sequential basis.
Profitability of all businesses was under pressure. However, company managed its working capital well and repaid loans to improve consolidated debt equity.
Earnings before interest, depreciation and amortization (EBITDA) recorded a drop of 57% (i.e. from 93 crores in corresponding quarter last year to 39 crores current quarter) without considering exceptional income of last year.
Profit before tax and exceptional income was 14 crores – a drop of 81% over the previous year amount of 71 crores. The profit after tax dropped by 83% (i.e. 8 crores compared to 47 crores last year). On a sequential basis, Profit before tax and exceptional income, dropped by 75% and profit after tax dropped by 76%.
Consolidated Segmental Operating Performance
Sales of the abrasives business on a consolidated basis registered a drop of 4%. Sales for the quarter was 198 crores (207 crores for the corresponding period of last year). On a sequential basis, this was a drop of 6%.
Profit before interest and tax on a consolidated basis recorded a drop of 36% i.e. from 30.3 crores to 19.3 crores, on a quarter on quarter basis. On a sequential basis, this was a drop of 15%.
The muted growth trends in India had an adverse impact on the market sentiments, thereby resulting in low off take by the channels. The manufacturing industries continued to have lower levels of production owing to weak market demand.
At a consolidated level, the net sales for Q3 were lower at 132 crores versus 168 crores for the corresponding quarter last year. On a sequential basis, this was a drop of 29%.
Profit before interest and tax on a consolidated basis recorded a drop from a profit of 29.6 crores to a loss of 8.3 crores, on a quarter on quarter basis. This was largely due to volume drop in South African subsidiary owing to deferment of orders by customer on the back of expected drop in raw material prices. Russian subsidiary also had a volume de growth in this quarter, however, on a calendar year basis, the volumes were flat. Our Indian business continues to face structural challenges on the micro silicon carbide business.
The ceramics segment recorded a 2% drop in sales on a consolidated basis (119 crores vs. 121 crores last year). On a sequential basis, this was a drop of 11%.
Alumina Ceramics business from India, had challenges from market due to project postponements. Refractories sales were lower owing to delayed project orders from user industries. Australian entity registered a sales growth.
Profit before interest and tax of the ceramics business on a consolidated basis recorded a drop from 23.1 crores to 13.4 crores, on a quarter on quarter basis.
The Board of Directors of the Company at its meeting held on February 5, 2013 has recommended an interim dividend of 0.50/- per share to the shareholders of the Company.
About the Murugappa Group
Founded in 1900, the 22314 Crores (USD 4.4 billion) Murugappa Group is one of India’s leading business conglomerates. The Group has 28 businesses including ten listed Companies actively traded in NSE & BSE. Headquartered in Chennai, the major Companies of the Group include Carborundum Universal Ltd., Cholamandalam Investment and Finance Company Ltd., Cholamandalam MS General Insurance Company Ltd., Coromandel International Ltd., Coromandel Engineering Company Ltd., E.I.D. Parry (India) Ltd., Parry Agro Industries Ltd., Tube Investments of India Ltd., and Wendt (India) Ltd.
Market leaders in served segments including Abrasives, Auto Components, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Bio-products and Nutraceuticals, the Group has forged strong alliances with leading international companies like Groupe Chimique Tunisien, Foskor, Mitsui Sumitomo, Morgan Crucible and Sociedad Química y Minera de Chile (SQM). The Group has a wide geographical presence spanning 13 states in India and 5 continents.
Renowned brands like BSA, Hercules, Ballmaster, Ajax, Parry’s, Chola, Gromor and Paramfos are from the Murugappa stable. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees.