News from Notch Consulting, Inc.

April 28, 2009

Aditya Birla Nuvo Reports Results – Carbon Black Business Reports First Ever Loss but Production and Utilization are Up from Previous Quarter

Filed under: Carbon Black — Notch @ 5:26 pm

On Tuesday, Aditya Birla Nuvo Ltd. announced its results for the quarter and fiscal year ended March 31, 2009. The company posted a fourth-quarter consolidated net loss of Rs. 141.15 crore, compared with a net loss of Rs. 21.84 crore for the same quarter last year. The company’s loss per share for the most recent quarter widened to Rs. 15.11 from Rs. 2.52 in the prior year’s quarter. The company’s quarterly net revenue rose 11% to Rs. 4,096.91 crore from Rs. 3,683.34 crore in the year-ago quarter.

For the fiscal year ended March 31, 2009, Aditya Birla Nuvo reported a consolidated net loss of Rs. 430.52 crore, compared with a net profit of Rs. 150.78 crore for the fiscal year ended March 31, 2008. The company’s loss per share for the year totaled Rs. 45.73, down from a profit of 15.95 per share in the prior fiscal year. The company’s net revenue for the fiscal year rose 26% to Rs. 14,200 crore, compared to Rs. 11,250 crore for the last fiscal year.

The Carbon Black business reported consolidated revenue of Rs. 238.09 crore for the most recent quarter, down 11% from Rs. 267.07 crore in the year-ago quarter. However, annual revenues in the Carbon Black business rose 27% to Rs. 1095.64 crore for the fiscal year ended March 31, 2009, up from Rs. 863.84 crore for the previous fiscal year. The Carbon Black business reported its first ever quarterly loss of Rs. 13.75 crore (PBIT – Profit before Interest and Tax) for the most recent quarter, compared to a profit of Rs. 30.92 crore for the same quarter last year. The company cited severe fluctuations in crude oil prices during the quarter, as well as lower offtake from the tire industry in explaining the loss. However, the company reports that demand from the tire industry has shown improvement in the last quarter and losses have been curtailed. Aditya Birla Nuvo expects the Carbon Black business to regain profitability in the next quarter due to low crude oil prices.

Regarding its expansions, the company notes in a presentation accompanying the results that its greenfield expansion (at Patalganga) by 75 MTPA will occur by March 2010, and that “Project activities will be aligned to match commencement of production with the demand revival.”

Hi Tech Carbon saw carbon black production fall 24% in the most recent quarter to 45,182 tonnes, down from 59,783 tonnes in the same quarter last year. Capacity utilization fell to 78.6% for the most recent quarter compared to 104.0% in the same quarter last year. These declines were driven by a 19% drop in quarterly sales volumes, with volumes falling to 48,859 tonnes in the most recent quarter from 60,115 tonnes in the year-ago quarter.

HTC’s annual production also declined, falling to 202,076 tonnes for the fiscal year ending March 31, 2009 compared to 215,103 tonnes for the previous fiscal year. This caused a drop in capacity utilization to 87.9% for the most recent fiscal year compared to 102.4% for the previous fiscal year.

Despite the loss and the production declines, the Carbon Black unit’s Q4FY09 results do offer some very promising news for those watching for signs that the current downturn has reached its bottom.¬† In particular, carbon black production grew 17% from Q3 FY 2009 (ended December 31, 2008), rising from 38,589 tonnes in Q3 to 45,182 tonnes in Q4. Capacity utilization improved by a similar measure, rising from 67% in Q3 to 79% in Q4. Finally, carbon black sales volumes were up 33% in the most recent quarter, rising from 36,831 tonnes in Q3 to 48, 859 tonnes in Q4.

Here are the links:
Results
Press Release
Presentation

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