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GHCL Ltd., posts productive results for Q3/9 months, FY 2008-09
31
Jan '09
GHCL has continued its growth journey during the first 9 months of the current year despite severe meltdown in the Global Economy. The Company has posted a very strong financial performance in its core business area of Inorganic Chemicals i.e. Soda Ash.

Total Revenue for Q3 FY 2008-09 declined by 5.35% to Rs. 283 crore from Rs. 299 crores reported in the Q3 FY 2007-08, Revenue for the first 9 months has increased to Rs. 919 crore as against Rs. 768 crore in the corresponding period of last year i.e. a growth of 20%. The revenue from Inorganic Operations has increased from Rs. 453 crore to Rs.612 crore i.e. a growth of 35%.

The Profit after Tax (PAT) for the quarter ended December 31, 2008, is dropped by 50 % to Rs. 16 Crore from Rs. 32 Crore reported in the quarter ended December 2007. For the nine months period PAT dropped by 10.1% at Rs. 80 Crore.

During the 3rd quarter October to December'08, the company undertook a planned shutdown (normally undertaken at an 18-month interval) for the maintenance of its Soda Ash Plant. There was no shutdown in the corresponding period of last year. This has resulted in reduction in production and sales during the current quarter.

In addition, there was a marginal reduction in Soda Ash price (around 3%) during this quarter. Despite this, the revenue from the Inorganic Chemicals has gone up by 16% as compared to the corresponding quarter of last year. (Rs.201 crore vs Rs.174 crore).

The cost of production for Soda Ash during the quarter was high due to higher coal and other raw materials costs as the same were procured at the old contracted prices which now have come down significantly. The benefit of this reduced cost would be available to the company partly in Jan'09 and fully from March'09 onwards.

The Home-Textile operations got significantly affected due to worsening power situation in Tamil Nadu where the Government could not meet even 60% of our total power requirement. Besides this, the Global Economic meltdown which got accelerated in the last quarter of 2008, also to some extent affected our sales to USA and European Markets. Due to both these factors, the revenue of Home Textile division declined from Rs.124 crore last year to Rs.81 crore in current quarter. However, for April to December there is only a marginal drop in Home Textile Revenue from Rs. 309 crore last year to Rs. 303 crore this year.

Despite the above factors, for 9 months period April to Dec'8, the company has achieved a robust growth in both EBITDA and overall Operating Profit level as compared to last year.


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