Deepak Fertilisers posts Rs 166.49 Cr profit in FY18

Deepak Fertilisers posts Rs 166.49 Cr profit in FY18
Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) today announced its financial results for the quarter ended March 31, 2018

Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) today announced its financial results for the quarter ended March 31, 2018. Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) today announced its financial results for the quarter ended March 31, 2018.
On a standalone basis, total income of the company for the year FY 18 achieved a growth of 51 percent at Rs. 3,280.63 crore as compared to Rs 2171.92 crore in FY 17. The profit before tax (PBT) recorded a marginal dip of 4 percent from Rs 137.01 crore in FY 17 to Rs 130.93 in FY 18. The profit after tax (PAT) recorded a growth of 25 percent from Rs 90.30 crore in FY 17 to Rs 112.89 crore, the company said in a statement.
On consolidated basis, the total income of the company grew from Rs 4,393.98 crore in FY17 to Rs 6,085.63 crore in FY18, primarily driven by increase in NPK (nitrogen, phosphorous and potassium) volumes and enhanced trading volumes of solvents. PBT and PAT were reported at Rs 232.88 crore and Rs 166.49 crore in FY 18 as against Rs 232.76 crore and Rs 156.93 crore in FY17 respectively. The company gained leading market position in Maharashtra with 20.6 percent market share in bulk fertiliser segment. However, due to first year of operation of its NPK plant and increased competition in the market place, 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, the statement noted.
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 percent increase in revenue over FY17, the statment further said.
Speaking on the financial results, Sailesh C. Mehta, Chairman & Managing Director, DFPCL said, “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 fertiliser sector, higher capacities utilisation across segments and undertaking operational excellence initiatives.”
“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,” Mehta added.
The company launched Smartek range of value-added fertilisers, a first-of-its-kind fertiliser that not only improves the nutrient consumption of the plant but also helps in improving and maintaining soil condition. The market feedback is encouraging the company to fast track crop specific range of fertilisers.
Q4 financial results
On a standalone basis, total income of the company for the fourth quarter of FY18 grew by 89 percent from Rs 619.77 crore in Q4 of FY17 to Rs 1,174.40 crore in Q4 of FY 18. PBT recorded a growth of 29 percent from Rs 38.74 crore in Q4 of FY17 to Rs 49.95 crore in Q4 of FY18, while PAT recorded a growth of 112 percent from Rs 25.54 crore in Q4 of FY17 to Rs 54.07 crore in Q4 of FY18, the statement noted.
According the company statement, on consolidated basis, the total income of the company grew by 53 percent, from Rs 1,256.27 crore in Q4 of FY17 to Rs 1,916.33 crore in Q4 of FY18 driven by increase in TAN and solvent trading volumes. PBT stood at Rs 43.38 crore in Q4 of FY18 as compared to Rs 70.54 crore in Q4 of FY17 and PAT stood at Rs 38.98 crore in Q4 of FY18 as compared to Rs 32.46 crore in Q4 of FY17. Higher raw material cost in Q4 of FY18, especially ammonia and natural gas, which increased by 32 percent and 25 percent respectively on year-on-year basis, impacted the profitability.
Fertiliser segment reported revenues of Rs 445.92 crore in Q4 of FY18 as compared to Rs 342.27 crore in Q4 of FY17. Sudden price increase of phosphoric acid prices, which was not passed through to trade during the quarter impacted overall segment profitability. Segment reported a loss of Rs 18.26 crore in Q4 of FY18 as compared to profit of Rs 11.85 crore Q4 of FY17. As the new NPK plant stabilises and capacity utilisation is increasing, the company will be able to replace traded products with better margin manufactured products, the financial report of the company stated.
According to the report, chemicals segment reported revenues of Rs 1,454.11 crore in Q4 of FY18 as compared to Rs 903.05 crore in Q4 of FY17, and segment profit stood at Rs 140.26 crore in Q4 of FY18 as compared to Rs 111.43 crore in Q4 of FY17. 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. Continuing from the previous quarter, Technical Ammonium Nitrate continued to operate on higher capacity utilisation based on improved demand. Reaffirmation of Anti-Dumping Duty for the next five years is encouraging and will further strengthen the outlook of TAN business.

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