Conference Call with Chemplast Sanmar Management and Analysts on Q3FY24 Performance and Outlook. Listen to the full earnings transcript.
Specialty Chemicals company Chemplast Sanmar announced Q3FY24 & 9MFY24 results: Financial Highlights: - Revenue from Operations (Q3FY24): Rs 888 crore, a decrease of 25% from Rs 1,189 crore in Q3FY23. - EBITDA (Q3FY24): (Rs 7 crore), non-meaningful comparison (nm) with Rs 78 crore in Q3FY23. - EBITDA Margin (Q3FY24): -1%, significant decline from 7% in Q3FY23. - PAT (Profit After Tax) (Q3FY24): (Rs 89 crore), PAT Margin at -10%, a significant downturn from Rs 27 crore, 2% in Q3FY23. - Revenue from Operations (9MFY24): Rs 2,872 crore, down by 24% from Rs 3,794 crore in 9MFY23. - EBITDA (9MFY24): Rs 5 crore, declined by 99% from Rs 371 crore in 9MFY23. - PAT (9MFY24): (Rs 127 crore), PAT Margin at -4%, decreased from Rs 106 crore, 3% in 9MFY23. Key Business Highlights: - Suspension PVC and Paste PVC prices decreased by 8% and 6% respectively on a quarter-over-quarter basis. - Caustic Soda and Chloromethanes prices remained flat compared to the previous quarter. - EDC (Ethylene Dichloride) prices saw an increase of 12.5% from Q2FY24 to Q3FY24. - Power costs rose marginally by around Rs 4 crore from the previous quarter. - Phase 1 expansion of the Custom Manufactured Chemicals division began commercial despatches. Projects Update: - Paste PVC expansion project is expected to be commissioned in Q4FY24. - Phase 2 of the Custom Manufactured Chemicals expansion is projected to be completed in Q1FY25. Ramkumar Shankar, Managing Director, stated: "After a relatively better Q2FY24, Q3FY24 performance ran into heavy weather due to further correction in PVC prices on account of dumping from China and other countries, slow down in the Other Chemicals business due to the over-supply situation in India, increase in key feedstock prices and adverse impact of the lag effect in correction of VCM prices. However, the boom in the infrastructure and real estate sectors is driving the strong demand for PVC. We expect a gradual recovery in prices and margins over the next 2-3 quarters. The Other Chemicals business is also expected to witness improvement in prices in the next 3-4 quarters once the excess supply is absorbed by the market. In our Custom Manufactured Chemicals Division's business, the pipeline is healthy. We commercialised 3 new products this year and a number of products are under various stages of development. Despite the challenges on account of the downturn in the global agrochemicals industry and the consequent inventory rationalisation, we expect this business to deliver reasonable growth during the year. While commercial production from Phase 1 of the expansion project has commenced, Phase 2 is expected to be completed in Q1FY25. The 41 ktpa Paste PVC project is expected to start commercial production in Q4FY24. This will further cement our position as the leading Paste PVC producer in India. Despite the recent uncertainty in the industry, we are confident of the long term potential of all our businesses and are strengthening our capabilities and relationships to grow in a sustainable manner." Result PDF
Conference Call with Chemplast Sanmar Management and Analysts on Q2FY24 Performance and Outlook. Listen to the full earnings transcript.
Specialty Chemicals company Chemplast Sanmar announced Q2FY24 results: Financial Performance: - Revenue from Operations for Q2FY24 amounted to Rs 988 crore, a decrease of 17% YoY. - EBITDA for Q2FY24 was Rs 46 crore, with an EBITDA margin of 5%. - PAT for Q2FY24 was Rs 26 crore, with a PAT margin of 3%. Pricing and Demand: - Prices of both Suspension and Paste PVC were marginally higher in Q2FY24 on a QoQ basis. Prices were 2.5% to 5% higher sequentially. - Caustic Soda and Chloromethanes prices witnessed further correction in Q2FY24 compared to Q1FY24. - Imports of both Suspension and Paste PVC saw an increasing trend towards the end of Q2, resulting in some correction in prices in October. - Demand for PVC products remains strong, especially in the infrastructure and real estate sectors. Other Chemicals Business: - The Other Chemicals business (Caustic Soda, Chloromethanes, Hydrogen Peroxide, Refrigerant gases) experienced pricing pressures due to weak demand and excess supply in the Indian market. - Some signs of price recovery were observed towards the end of October. Projects Update: - CMC Phase 1 was commissioned by the end of September 2023 and is being ramped up. - CMC Phase 2 is on track for completion by the end of FY24. - The paste PVC project is on track for commissioning in Q3FY24. Commenting on the results, Ramkumar Shankar, Managing Director, said, “Following a tepid Q1FY24, Q2FY24 witnessed a relatively better performance mainly due to improvement in prices of both Suspension and Paste PVC coupled with lower feedstock prices. The top line was flat while EBITDA was back in the black during the quarter. However, the imports of both Suspension and Paste PVC witnessed an increasing trend towards the end of Q2 with heavy arrivals from China. This trend has spilled over to Q3 as well, resulting in some correction in prices in October. We expect the PVC margins to be under pressure in Q3. The demand outlook for our PVC products, however, remains strong with a boom in the infrastructure and real estate sectors. We expect the recovery in prices and margins to be gradual over the next 2-3 quarters. The Other Chemicals (Caustic Soda, Chloromethanes, Hydrogen Peroxide, Refrigerant gases) business continued to witness pricing pressures during the quarter due to weak demand, excess supply situation in India due to recent capacity additions, and the global slowdown. There are some initial signs of recovery in prices towards the end of October. The inquiries for our Custom Manufactured Chemicals Division’s business continue to remain robust. To effectively address the growing demand, we continue to enhance our capabilities. With the recent signing of the third LOI with a global agrochemical innovator for an Active Ingredient, we have strong visibility with respect to steady-state capacity utilization of the new production block and are on track to achieve Rs 1000 crore revenues in the next 3-4 years While we face headwinds in the near term, the business prospects for our products continue to be strong in the medium to long term. With the projects on track for commissioning as per the slated timelines, we are confident of delivering a healthy performance in the future.” Result PDF