meghmani organics limited 1h and 2q 1h and 2q fy08 ...400 500 600 margin reduced, due to pressure on...
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MeghmaniMeghmani Organics LimitedOrganics LimitedMeghmaniMeghmani Organics LimitedOrganics Limited1H and 2Q 1H and 2Q FY08 ResultsFY08 Results
Corporate Overview - MOL
Established in 1986, MOL is amongst the leading pigments and
agrochemicals manufacturers in India
Capitalizing on the global outsourcing trend
Corporate Focus
PIGMENTS & AGROCHEMICALSSpecializes in the manufacture of green & blue Business p gpigment products and a broad spectrum of commonly used generic pesticides
BusinessFocus
PIGMENTS: Multiple applications in printing inks, plastics, paints, textiles, leather, paper & rubber
AGROCHEMICALS: Crop protection and non-crop applications like Industry
Focus AGROCHEMICALS: Crop protection and non crop applications like Public health, termite & insect control, veterinary applications
Focus
GLOBAL FOCUSwith markets in the US, Europe, Latin America & Asia Pacific
MarketFocus
The Art of Manufacturing
4 multi location plants in Gujarat, Western Part of India
Total floor area of 180,000 sq mtsq
ISO 9001-2000 certified
A kl h Panoli Plant
Ankleshwar PlantPigments Agrochemicals
Vatva Plant Chharodi Plant
Strategic Location
Meghmani Group’s plants are located in the state of Gujarat famous for its natural locational famous for its natural locational advantage
PigmentsDyestuffs
Vatva Plant/sy
Additives
Agro Chemicals
Panoli Plant
Chharodi Plant/s
Ankleshwar PlantAnkleshwar Plant
New site near port - Dahej
Located in India’s prime chemical beltLocated in India s prime chemical belt
Close proximity to sources of raw materials at low cost
Proximity to key ports, railway and road knetwork
Large pool of scientists and engineers
Meghmani’s Global Network
i k f 20 di ibExtensive network of 20 overseas distributors:
Branch offices in the US, Europe, Turkey and China
Warehouses in Germany, Belgium, Turkey, Russia, USA, Uruguay and China
Over 1 000 stockists agents distributors and dealers covering Indian marketOver 1,000 stockists, agents, distributors and dealers covering Indian market
Over 350 customers worldwide incl. MNC’s and OEM’s 75% revenue from Exports market
Corporate Strategy
Two Strategic Business Units
MEGHAFAST ™ MEGASTAR™MEGACYPER™
Applications Applications
SBU Pigments & Additives
SBU Agrochemicals
Paints & Coatings, Inks, Plastics, Textiles, Leather, Rubber, etc.
Crop protectionNon-crop applications like Public health,Control of insects in household applicationshousehold applicationsVeterinary applications
1H & 2Q (2008) 1H & 2Q (2008) Results AnalysisResults Analysis
Key Highlights of 2Q2008
of Rs1 7 billionRs1 7 billion +25 2%Sales … of Rs1.7 billionRs1.7 billion, +25.2%
… of Rs329.4 millionRs329.4 million, +6.0%
Sales
Gross profit
… of Rs93.0 millionRs93.0 million, -12.7%
profit
Net profit
… of Rs77 centsRs77 centsEPS
Record Achievements for 2 consecutive quartersRecord Achievements for 2 consecutive quarters Exceeding Rs1 billion in Revenue
Financial Highlights
3 months ended 30 Sep3 months ended 30 Sep 6 months ended 30 Sep6 months ended 30 Sep
In Rs millionsIn Rs millions 20082008 20072007 % Chg% Chg 20082008 20072007 % Chg% Chg
Revenue 1,771.1 1,366.8 25.2 2,842.2 2,381.2 19.4
Gross Profit 329.5 310.7 6.0 596.7 530.7 12.4
Profit from ops 140.4 140.8 (0.2) 280.2 268.6 4.3
P fit b f t 117 5 109 5 7 4 223 5 217 5 2 8Profit before tax (PBT)
117.5 109.5 7.4 223.5 217.5 2.8
Income tax (24.5) (2.8) 761.0 (46.6) (20.5) 127.7
Profit after tax (PAT) 93.0 106.6 (12.7) 176.9 197.0 (10.2)( ) ( ) ( )
Gross margin (%) 19.3 22.7 3.4 21.0 22.3 (1.3)
PBT margin (%) 6.6 8.0 (1.4) 7.9 9.1 (1.2)
PAT margin (%) 5.3 7.8 (2.5) 6.2 8.3 (2.1)
EPS (Rs) 0.37 0.53 (0.16) 0.77 0.98 (0.21)
Earnings per SDSs (Rs)
0.19 0.27 (0.08) 0.39 0.49 (0.20)
For conversion to SGD, please use an average exchange rate of S$1: Rs29.1345 for Sept 2007
Balance Sheet Highlights
In Rs millionIn Rs million 1H 081H 08(30 Sep 07)(30 Sep 07)
1H 071H 07(30 Sep 06)(30 Sep 06)
FY 07 FY 07 (31 Mar 07)(31 Mar 07)(30 Sep 07)(30 Sep 07) (30 Sep 06)(30 Sep 06) (31 Mar 07)(31 Mar 07)
Trade receivables 2,348.9 2,238.8 1,850.8
Inventories 916 5 885 0 905 2Inventories 916.5 885.0 905.2
Cash & bank balances 60.6 58.8 82.5
Shareholders’ equity 3 933 4 2 595 0 2816 1Shareholders equity 3,933.4 2,595.0 2816.1
NTA per share Rs15.47 Rs12.93 Rs13.98
Inventory turnover 75 days 88 days 93 daysInventory turnover 75 days 88 days 93 days
Debtors holding 151 days 172 days 145 days
For conversion to SGD, please use an average exchange rate of S$1: Rs29.1345 for Sept 2007
1H FY08 Performance1H FY08 Performance
Revenue
Rs'm A h i l di i i +28 3%
1,500
2,000
Rs'm Agrochemicals division +28.3%
Higher quantity sales of Acephate
780.4 1,001.21,000
Pigments division -6.9%
Domestic sales of Pigments affected due to breakage in effluent treatment pipe line of
577.8 537.8
0
500
1H07 1H08
effluent treatment pipe line of Pigment Panoli division owned and installed by Bharuch Environ Infrastructure Limited (BEIL).
Trading sales not shown.
Pigments Agrochemicals
g
G ’ A h i l di i i t d Group’s Agrochemicals division outpaced Pigments division
Revenue by Geographical Market
2Q 082Q 08By Geographical Market
E t l +29 4% t R 1010 8
40.9%42.8%
• Export sales +29.4% to Rs 1010.8m
• Domestic sales +19.6% to Rs 700.34m
59.1%57.2%
2Q 072Q 07 1H 081H 08
Export Domestic35.5%
38.1%
1H 071H 0764.5%
61.9%By Geographical Market
• Export sales +14.5% to Rs 1759.1m
Export Domestic
• Domestic sales +28.1% to Rs 1083.1m
Gross Profit
Rs'm
700800900
1,000
For Agrochemicals: Percentage of gross profit increased marginally while profit
289.88 293.4
300400500600
increased marginally while profit margin reduced, due to pressure on pricing on all Agrochemical products
240.0 273.4
0100200
1H07 1H08
For Pigments: Gross profit suffered due to less quantity sales.
1H07 1H08
Pigments Agrochemicals
Gross Margin Analysis
Gross Gross MarginMargin
2Q08 2Q08 (%)(%)
2Q07 2Q07 (%)(%)
Chg Chg (% pts)(% pts)
1H08 1H08 (%)(%)
1H07 1H07 (%)(%)
Chg Chg (%pts)(%pts)gg
Pigments 20.7 23.7 (18.6) 23.5 22.5 13.9
Agrochemicals 18.9 22.3 8.6 19.8 22.5 1.2
Total 19.3 22.7 6.0 21.0 22.3 12.4
Pigments gross profit suffered due to less quantity sales due to less production for the reasons beyond the control of Management production for the reasons beyond the control of Management.
Agrochemicals percentage gross profit increased marginally due to pressure on pricing on all Agrochemical products.
Cost Structure
In Rs’m 2Q08 2Q07 % Chg 1H08 1H07 % Chg
COS (1,381.7) (1,056.1) 30.8 (2,245.6) (1,850.4) 21.4
Distribution expenses
(143.7) (119.5) 20.2 (240.4) (215.6) 11.5
Admin. expenses (49.3) (54.9) (10.2) (82.5) (84.2) (2.1)p ( ) ( ) ( ) ( ) ( ) ( )
Other operating expenses
(16.9) (0.7) 2319.4 (28.9) 22.3 (229.3)
Finance cost (36 1) (28 2) 28 1 (76 5) (50 5) 51 5
Costs increase in tandem with sharply improved export sales
Finance cost (36.1) (28.2) 28.1 (76.5) (50.5) 51.5
Distribution costs increased in line with rise in sales
Administrative costs lowered by 10.2% to RS 49.3million
Other operating expenses mainly due to Indian Rupee become stronger Other operating expenses mainly due to Indian Rupee become stronger against US Dollar
Capacity Utilisation: Pigments
1 2 0 0 0M T p a
2 0 0 %
%
In s t a lle d c a p a c it y U t lis a t io n
1 3 9 %1 0 ,0 0 0
1 2 ,0 0 0
1 5 0 %
2 0 0 %In s t a lle d c a p a c it y U t lis a t io n
1 1 7 %
7 7 %
1 1 3 %
6 ,0 0 0
8 ,0 0 0
1 0 0 %
3 6 0 0
1 0 , 2 0 05 0 %
2 ,0 0 0
4 ,0 0 0
5 0 %
1 ,2 0 0 6 0 0
3 , 6 0 0
6 0 00
2 ,0 0 0
G 7
Blu
e
Blu
e
Blu
e
ent
ives
0 %
P
CPC
B
Alp
ha
B
Bet
a B
Pigm
Add
it
Production up to 30.09.2007
Capacity Utilisation: Agrochemicals
1 8 0 0
2 , 0 0 0
M T p a
2 5 0 %
%I n s t a lle d c a p a c it y U t lis a t io n
1 3 4 %1 , 4 0 0
1 , 6 0 0
1 , 8 0 0
2 0 0 %
1 , 7 5 0
1 , 5 0 08 3 %
1 2 9 %
8 0 0
1 , 0 0 0
1 , 2 0 0
1 0 0 %
1 5 0 %
7 5 0
1 , 2 0 0
9 0 0 1 , 0 0 0
6 0
5 7 %
1 4 % 2 0 0
4 0 0
6 0 0
5 0 %
6 00
B/M
PB
A
AC
/CM
A
ep
ha
te
me
thri
n
me
thri
n
ph
am
eth
rin
py
rip
ho
s
0 %
MP
B
CM
A
Ac
Cy
pe
r
Pe
r Al
Cy
pe
r
Ch
lor p
Production up to 30.09.2007
Outlook & Business StrategiesOutlook & Business Strategies
Growth Strategies
Pigments Agrochemicals
Increase production of PG7 plant at Installed multi faceted productionExpand Expand production production capacitycapacity
Increase production of PG7 plant at Vatva
Evaluating possibilities of expanding PB capacities of Panoli plant
Installed multi-faceted production capacities to produce Permethrin, Alpha Cypermethrin and Acephate at Ankleshwar Plants
New New ProductsProducts
Introduce new range of High Performance Pigments (HPP) for global customers
430 new registrations in the pipeline in 60 countries in various stages
Gains expected from new registrations in B il d P ki tBrazil and Pakistan
Outsourcing opportunities: India’s ability to provide high quality manufacturing
Focus on domestic branded formulations
Meghmani Energy Limited – CaptiveOtherOther attracting a higher level of outsourcing
from companies in developed countries
Meghmani Energy Limited Captive power plant at Chhrodi unit
Meghmani Finechem Limited – Caustic Chlorine project at Dahej
Our Future Roadmap Our Future Roadmap
Meghmani Finechem Limited
Project Status
Acquired 650,000 sq. mts land in Dahej
Major Technology tie ups
for Caustic-Chlorine Complex (AKCC)
for CPP (Cethar Vessels)( )
for detailed engineering (Simon India Limited)
Recruited 1 VP 4 AGM 3 ConsultantsRecruited 1 VP, 4 AGM, 3 Consultants
Project investment: 504 crores
Expected date for the commencement of the 1st phase: December 2008 or January 2009
Why Gujarat?
5% of India’s population contributes to 16% industrial production
Largest coastline in India – 1600 kmsg
Highest production of salt in India
41 ports, 11 airports, best road and rail connectivity
A il bilit f l t t kill d l bAvailability of low cost yet skilled labour
Power infrastructure
Well connected to major cities in the USA, EU, Asia, Middle-East and other j I di itimajor Indian cities
Well developed chemical belt
Why Dahej?
Strategically located on the Chemical belt of India
Proximity to port, rail, highways, and SEZy p g y
Proximity to salt fields
Proximity to Caustic-Chlorine consuming industries
Pl tif l il bilit f ft i t Plentiful availability of soft river water
Dahej - a new industrial area in focus
Why MOL?
Acquisition of land in Dahej – a strategic move
Captive power plant of 40 MGWp p p
Strong growth fundamentals
Meghmani Group – a well known and respectable name in the Chemicals field
F ll d f h i l t i t dFully geared up for chemical outsourcing trend
A transparent company lead by techno-commercial promoters and professional management
Summary: Proposed Caustic Chlorine Complex
What: • A special purpose vehicle incorporated on 11 Sep 2007 to set up a Caustic Chlorine Complex in Dahej
• The large-scale, integrated complex will be used for the production of Caustic Soda Lye/Flakes, Chlorine Gas and production of Caustic Soda Lye/Flakes, Chlorine Gas and Hydrogen Gas.
Estimated cost and P d
• Approximately Rs 503.16 crores (S$186.47m)
• Funded Rs 344.18 crores (S$127.55 m) by Debt and Rs Proposed funding:
Funded Rs 344.18 crores (S$127.55 m) by Debt and Rs 158.98 crores (S$58.92m) by Equity/Quasi equity.
Significance for
• Achieve inorganic growth and vertical integration in a diversified yet chemistry-related business
Meghmani: • A ready and captive source of some basic chemicals for Meghmani’s Pigments and Agrochemicals operations
• Dahej – a strategic location for chemical and related industries
Phase 1 of the project is expected to commence by December 2008 / January 2009. Phase 2 will comprise the production of derivative products with higher value-add. The annual manufacturing capacity of the complex will be as follows: be as follows:
•Caustic Soda – 113,000 Ton per Annum (TPA)• Chlorine Gas – 100,000 TPA • Hydrogen Gas – 258,000 NM3
• Diluted Sulphuric Acid – 2,600 TPA • Hydrochloric Acid – 9,970 TPA • Sodium Hypo Chloride – 8,300 TPA
Thank YouThank YouThank YouThank YouQ & AsQ & As