Deepak Fertilisers reports 112% jump in Q4 net at Rs54.07 cr
31 May 2018
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Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) has reported a 112 per cent increase in its standalone net profit (after-tax) at Rs54.07 crore for fiscal fourth quarter ended 31 March 2018, while its standalone income increased by 89 per cent increase in its consolidated income for the quarter ended 31 march 2018 to Rs1,174.40 crore from Rs619.77 crore in the same quarter of the previous financial year.
Profit before tax (PBT) for the January-March 2017-18 quarter recorded a growth of 29 per cent to Rs49.95 crore from Rs38.74 crore in the fourth quarter of FY17.
Driven by volumes across chemicals and fertilizers, the company saw its revenues cross Rs6,061 crore against Rs4,378 crore in the previous year
On consolidated basis, the total income of the company grew by 53 per cent, from Rs1,256.27 crore in Q4FY17 to Rs1,916.33 crore in Q4FY18 driven by increase in TAN and solvent trading volumes. PBT for the quarter stood at Rs43.38 crore compared to Rs70.54 crore in Q4FY17 while PAT stood at Rs38.98 crore in 04 FY18 compared to Rs32.46 crore in 04 FY17. Higher raw material cost in 04 FY18, especially ammonia and natural gas, which increased by 32 per cent and 25 per cent, respectively, impacted the profitability, the company stated.
Chemicals segment reported revenues of Rs1,454.11 crore in Q4FY18 compared to Rs903.05 crore in Q4FY17, and segment profit stood at Rs140.26 crore in 04 FY18 against Rs111.43 crore in Q4FY17.
To strengthen its position as the most preferred supplier of solvents to the pharma sector, the company continued trading activities, which contributed positively to the topline growth of the segment. All the manufactured products in chemical segment reported growth in volumes during the current quarter. Technical Ammonium Nitrate continued to operate on higher capacity utilisation based on improved demand.
Deepak’s position has been strengthened by reaffirmation of anti-dumping duty for the next five years, which will further strengthen the outlook of TAN business.
Fertilizer segment reported revenues of Rs445.92 crore in Q4FY18 compared to Rs 342.27 crore in 04 FY17. The sudden price increase of phosphoric acid, which was not passed through to trade during the quarter impacted overall segment profitability, the company said. The segment reported a loss of Rs18.26 crore in Q4FY18 compared with profit of Rs11.85 crore in Q4FY17. With its new NPK plant stabilizing and capacity utilization increasing, the company expects to replace traded products with better margin manufactured products soon
On a standalone basis, total income of the company for FY18 grew 51 per cent to Rs 3,280.63 crore, compared to Rs.2,171.92 crore in FY 17. PBT recorded a marginal dip of 4 per cent from Rs137.01 crore in FY 17 to Rs130.93 crore in FY18, PAT recorded a growth of 25 per cent from Rs90.30 crore in FY 17 to Rs112.89 crores.
On consolidated basis, total income of the company grew from Rs4,393.98 crore in FY17 to Rs6,085.63 crore in FY18, primarily driven by increase in NPK volumes and enhanced trading volumes of solvents. PBT and PAT were reported at Rs 232.88 crore and Rs166.49 crore in FY 18 as against Rs. 232.76 crore and Rs156.93 crore in FY17 respectively.
The company gained leading market position in Maharashtra with 20.6 per cent market share in bulk fertilizer segment. However, due to first year of operation of its NPK plant and increased competition in the market, company incurred higher production and marketing cost, but plant stabilisation and better operating efficiencies are expected in the current year, which would help improve segment performance going forward.
Increase in raw material costs, especially natural gas and propylene, depressed margins in acids and increased depreciation, interest charge due to capitalisation of NPK plant and higher marked to market forex loss compared to previous year resulted in flat profitability in FY18 despite 38 per cent increase in revenue over FY17.
"FY18 has marked a significant milestone in our journey of growth. The year witnessed announcement of capacity expansion, gradual stabilising of new NPK plant production, launch of innovative products in the fertilizer sector, higher capacities utilisation across segments and undertaking operational excellence initiatives,” Sailesh C Mehta, chairman and managing director of DFPCL said.
“Our transformation journey to move from commodity offering to value added solution is shaping as per expectations. Currently, our management consulting partners are testing various hypothesis that would help us move from product-based pricing to value based pricing across segments, thereby improving the contribution margins,” he added.
Company launched Smartek range of value-added fertilizers, a first-of-its-kind fertilizers that not only improve the nutrient consumption of the plant but will also help in improving and maintaining soil condition. Market feedback has been positive, encouraging the Company to fast track crop specific range of fertilizers, it added.
“Pharma continues to grow steadily and leading nitro aromatics and nitric acid derivative manufacturers are expanding their capacities which are likely to be commissioned in FY19. These would provide an impetus of growth to acids and solvents businesses.”
“The Dahej Nitric Acid plant and IPA plant ore on track and are scheduled to be commissioned as per plan. Going forward we would continue to focus on strengthening our core that has been built with four decades of experience," It added.
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