Carborundum Universal’s Consolidated Q2
Net Sales up by 6% Consolidated PBIT down by 13%

Chennai, Oct 30, 2013: The Board of Directors met today and approved the results for the quarter ended 30th Sep 2013.

Consolidated Q2 financial performance

Consolidated net sales grew up by 6% to 552 crores from 522 crores, on a quarter on quarter basis. PBIT (excluding exceptional income) dropped by 13% from 62 crores in last quarter similar period, to 54 crores in the current quarter.

On a sequential basis, net sales grew by 10% and PBIT (excluding exceptional income) remained near same.

Sales growth was driven by the performance of both the Indian and Overseas operations. Margins came under pressure owing to rising input costs, strong dollar and a challenging customer market. The Electro minerals business segment recorded growth rate of 17%. The Abrasives business grew at 7% and Ceramics business de-grew by 7%. On a sequential basis, Electrominerals, Abrasives and Ceramics grew at 11%, 9% and 11% respectively.

Profitability of Electro minerals business improved on a quarter on quarter basis. For the other segments, profitability came under pressure. On a sequential basis, only Abrasives registered a growth in profit.

Earnings before interest, depreciation and amortisation (EBITDA) recorded a drop of 5% (i.e. from 79 crores to 75 crores) without considering exceptional income of last year.

Profit before tax and exceptional income was 47 crores – a drop of 15% over the previous year amount of 55 crores. The profit after tax dropped by 16% (i.e. 28 crores compared to 34 crores last year). On a sequential basis, Profit before tax and exceptional income, dropped by 1% and profit after tax grew by 3%.

Consolidated Segmental Operating Performance

Abrasives

Sales of the abrasives business on a consolidated basis registered an increase of 7%. Sales for the quarter was 225 crores (210 crores for the corresponding period of last year). On a sequential basis, that was a growth of 9%.

Profit before interest and tax on a consolidated basis recorded a drop of 5% i.e. from23.3 crores to 22.0 crores, on a quarter on quarter basis. On a sequential basis, that was an increase of 9%. The growth came by way of getting higher share of business from customers.

Electro Minerals

At a consolidated level, the net sales for Q2 were higher at 216 crores versus 185 crores for the corresponding quarter last year, which is a growth of 17%. On a sequential basis, the business grew by 11%.

Profit before interest and tax on a consolidated basis grew by 21% i.e. from 18.6 crores to 22.4 crores, on a quarter on quarter basis. This was largely due to increased Aluminas business in India and better captive power generation. On a sequential basis, the profits dropped by 13%.

Ceramics

The ceramics segment recorded a 7% drop in sales on a consolidated basis (124 crores vs. 133 crores last year). On a sequential basis, the business grew by 11%.

Alumina Ceramics, particularly Metalized, did well compared to sequential quarter in registering higher sales. Refractory business focused on Repairs Maintenance orders to register higher sales.

Profit before interest and tax of the ceramics business segment on a consolidated basis dropped by 41% i.e. from 25.0 crores to 14.8 crores. Profits came under pressure due to subdued market conditions in Refractory business In India, ceramic Tile business and competitive pressures in Australia.

About the Murugappa Group

Founded in 1900, the INR 225 Billion Murugappa Group is one of India’s leading business conglomerates. The Group has 28 businesses including eleven listed Companies 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., Sabero Organics Ltd., Shanthi Gears 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.