GRAPHITE INDIA LIMITED 
By Announces
Unaudited Standalone Second Quarter and Half Year Results for FY2012
Financial Performance Q2 FY2012 vs. Q2 FY2011
Gross Sales increased by 41%
Electrode sales volume increased by 40% Average capacity utilization up from 78% to 97%
KOLKATA, India, November 14th, 2011 - Graphite India Limited, the largest Indian graphite electrode producer (referred to as "Graphite India" or the "Company"), announces its Unaudited Standalone Second Quarter and Half Year Results for FY2012, in accordance with Indian GAAP.
Commenting on the results and performance, Mr. K. K. Bangur, Chairman of Graphite India said:
"Electrode revenues during the quarter have been encouraging, being supported primarily by strong volume growth. Our manufacturing units are currently close to full capacity utilization levels and our Durgapur expansion plan is progressing as per schedule. Although global EAF steel markets are expected to grow, we remain cautiously optimistic on the industry outlook. Management remains focused on strengthening customer relationships, implementing operational efficiencies and enhancing our technical capabilities."
Financial Highlights
(Rs. Crore) | Q2 | y-o-y Growth (%) | Q1 | q-o-q Growth (%) | Half year | y-o-y Growth (%) | |
(Rs. Crore) | FY2012 FY2011 | y-o-y Growth (%) | FY2012 | q-o-q Growth (%) | FY2012 FY2011 | y-o-y Growth (%) | |
Gross Sales Net Sales Operating Profit Margin (%) Net Profit Margin (%) Basic EPS (Rs) | 479 339 41.3% 462 324 42.5% 77 98 (21.8)% 16.6% 30.3% 42 49 (14.9)% 9.1% 15.2% 2.14 2.74 (21.9)% | 335 43.0% 319 44.9% 68 12.2% 21.5% 37 13.6% 11.6% 1.89 13.2% | 814 610 33.4% 780 582 34.0% 145 160 (9.6)% 18.6% 27.6% 79 84 (5.8)% 10.1% 14.4% 4.03 4.66 (13.5)% |
Operating Profit (net of foreign exchange gains/losses)
Margin (%)
Operating Profit includes all foreign exchange gains or losses. For Q2 FY2012 foreign exchange losses of Rs. 19.8 Crore have been shown under the head "other expenditure" (refer to Note 3 of Notes to Accounts). These foreign exchange losses are due to the impact of the unprecedented depreciation of the Rupee to the US Dollar primarily on foreign currency loan facilities availed by the Company. Q2 FY2012 Operating Profit, prior to foreign exchange losses, is Rs 96.5 Crore which would result in an operating margin of 20.9% (compared with an adjusted Operating Profit of Rs 90.1 Crore for Q2 FY2011 with margins of 27.8%).
1 | P a g eEconomic Environment
Global crude steel production1 has increased by 8.2% from 1,048 million MT in the first nine months of CY2010 to 1,134 million MT during the same period in CY2011. This compares with year on year growth for the last quarter of 10.3% and 7.6% for the first half of CY2011.
Steel Production (million MT)
Nine Months Ended
Region Sep-11 Sep-10 Change (%) Asia 728.3 665.2 9.5% India 53.9 51.2 5.3% China 525.7 474.9 10.7% North America 89.3 84.1 6.1% South America 36.8 32.7 12.5%
European Union 135.7 130.1 4.3%
The global average steel capacity utilisation has increased significantly from 74.8% in Q3 CY2010 to
78.8% in Q3 CY2011 but decreased from 82.4% at the end of the last quarter. These utilization levels have ranged between 76% to 83% during the first nine months of CY2011.
Crude oil prices declined from approximately $115/barrel at the beginning of Q3 CY2011 to
$103/barrel at the end of the quarter.
Operational Highlights
Q2 FY2012 Business PerformanceQ2 FY2012 Gross Sales increased by 41.3% compared to Q2 FY2011. This was primarily due to increased market demand for electrodes driving significantly higher volumes. Electrode sales volumes in the quarter increased by 40% compared to the same period last year. This increase was driven by both the domestic market as well as exports. Sales volumes in India grew by 10% and export sales volumes grew by 58% during the quarter. Net Sales growth in the non-electrode segments was also relatively strong during Q2 FY2012.
Operating Profits increased by 12.2% compared to the previous quarter. During the quarter, the Company has witnessed increase in input costs other than needle coke. Average capacity utilization increased from 78% in Q2 FY2011 to 97% in Q2 FY2012. Electrode production has increased by 24% during this quarter, compared to the same period last year.
Q2 FY2012 Net Profit increased by 13.6% compared to previous quarter and decreased by 14.9% as compared to Q2 FY2011. This was due to the unprecedented depreciation of the Rupee to the US Dollar primarily on foreign currency loan facilities availed by the Company. Interest expense increased from Rs. 0.85 Crore in Q2 FY2011 to Rs. 2.50 Crore in Q2 FY2012, as a result of an increase in working capital requirements and firming of interest rates.
1 worldsteel.org
2 | P a g e Balance SheetGraphite India remains focused on maintaining a conservative balance sheet in order to preserve strategic and operational flexibility. As of September 30, 2011, the Company had total debt of Rs.
424 Crore, cash and cash equivalents of Rs. 248 Crore, net debt of Rs. 176 Crore and Net Worth of
Rs. 1,482 Crore.
Segment Analysis(Rs. Crore) | Q2 | y-o-y Growth (%) | Q1 | q-o-q Growth (%) | Half year | y-o-y Growth (%) | |
(Rs. Crore) | FY2012 FY2011 | y-o-y Growth (%) | FY2012 | q-o-q Growth (%) | FY2012 FY2011 | y-o-y Growth (%) | |
Net Sales | 462 324 42.5% | 319 44.9% | 780 582 34.0% | ||||
Graphite and Carbon Power Steel Unallocated Less: Inter Segment Sales | 398 275 45.0% 11 8 34.2% 28 23 20.3% 38 28 36.3% (14) (10) | 272 46.5% 6 92.0% 9 202.6% 39 (1.5)% (7) | 670 487 37.7% 17 15 12.9% 37 45 (18.2)% 77 54 44.2% (21) (18) | ||||
Profit before Tax and Interest | 84 70 20.3% | 60 39.2% | 144 127 13.6% | ||||
Graphite and Carbon Power Steel Unallocated | 64 54 18.2% 10 8 30.0% 1 0 9 8 12.4% | 51 24.7% 4 166.9% (2) 7 23.8% | 115 101 13.5% 14 12 18.5% (1) 0 16 14 18.3% |
Performance Outlook
The World Steel Association2 now expects global steel consumption to grow year on year by 6.5% in CY2011 and 5.4% in CY2012. These forecasts assume that developing economies would continue to drive global growth and the impact of the European sovereign debt crisis on Asian demand is contained. The recovery of steel demand in the developed countries will be relatively modest compared to the more robust growth across Asia. India's steel demand is projected to grow by year on year 4.3% in CY2011 to 67.7 MT and 7.9% in CY2012. In context of these forecasts, global steel capacity utilization, currently between 76% to 83%, is expected to remain relatively high. This coupled with an increasing contribution of EAF share to total crude steel production will directly benefit the graphite electrode industry.
Although Graphite India's standalone capacity utilisation levels are currently 97%, the Company maintains a targeted consolidated annual capacity utilization of approximately 85-90% for FY2012. The Company has secured needle coke supplies until the end of FY 2012. Graphite India has initiated discussions with needle coke manufacturers to secure supply contracts for the next fiscal year. The electrode capacity expansion at Durgapur Plant by 20,000 MT is progressing as per schedule and is expected to be completed by Q4 FY2012.
2 worldsteel.org
3 | P a g eContact Details: | |
S. Chaudhary, Graphite India Limited | +91 (0) 33 2229 3792 |
Deepak Balwani, Churchgate Partners | +91 (0) 22 3953 7444 |
Sudhir Shetty, Adfactors Public Relations | +91 (0) 22 2281 3565 |
For further information on Graphite India see www.graphiteindia.com
Accounting Notes:
1. Gross Sales: Sales/Income from Operations, including
excise duty
2. Operating Profit: Earnings before interest, depreciation,
exceptional items and tax, and includes Other
Income
3. All financial margins are calculated based on Net
Sales
4. Net Worth: Share Capital and Reserves and Surplus
5. Basic EPS: Face value of Rs. 2.00; 19.54 Crore shares
Safe Harbour:This release contains statements that contain "forward looking statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Graphite India's future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Graphite India undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.
4 | P a g eGraphite India: At a Glance
1. Company Background
Graphite India is the largest Indian producer of graphite
electrodes and one of the largest globally, by total
capacity. Its manufacturing capacity of approximately 78,000
tonnes per annum is spread over four plants at Durgapur
(34,000 MT), Bangalore (13,000 MT), Nashik (13,000 MT) and
Nurnberg in Germany (18,000 MT). The Company accounts for
approximately 6.5% of global electrode capacity and has over
40 years of technical expertise in the industry. With its
corporate office in Kolkata, India, the Company services its
clients in over fifty countries, with no client accounting
for over 6% of revenues. Exports account for approximately
50% of revenues and export volumes increased over 3 times
from FY2001 to FY2011. Graphite India manufactures the full
range of graphite electrodes but stays focused on the higher
margin, large diameter, ultra-high power ("UHP") electrodes.
Approximately 85% of the Company's total capacity is
currently UHP.
Graphite India is well poised in the global graphite
electrode industry through its quality, scale of operations
and low cost production base. The Company's competitive edge
was particularly evident during the last decade, when low
prices for graphite electrodes resulted in many of the
leading players generating losses, but Graphite India however
remained consistently profitable and declared dividends. The
Company experienced steady double digit revenue CAGR over the
past five years despite a global slowdown. Graphite India
currently has a conservative leverage profile, with
significant financial capacity for organic or inorganic
expansion.
The Company's strategy is to become further vertically
integrated, continue its penetration of new markets and
clients as well as pursue value enhancing inorganic growth
opportunities. Graphite India currently manufactures Calcined
Petroleum Coke ("CPC") for use in electrode manufacturing. It
is also enhancing its presence in
value added graphite products for the auto, aerospace,
chemical, pharmaceutical, metallurgical and machine tool
industries.
The Company is further targeting focused reductions in its
manufacturing costs. A capacity expansion plan has been
initiated in its Durgapur (West Bengal) plant, to increase
capacity by 20,000
MT per annum, taking the total capacity towards
100,000 MT per annum.
The Company also has facilities designed for the manufacture
of impervious graphite equipment and glass reinforced plastic
pipes and tanks. It has an installed capacity of 33 MW of
power generation through hydel and multi-fuel routes.
2. Industry
Graphite electrodes are used in electric arc furnace ("EAF")
based steel mills and is a consumable item for the steel
industry. The graphite electrode industry is highly
consolidated with the top five major global players
accounting for 75% of the high end UHP electrode capacity.
Majority of this capacity however, is currently located in
high cost regions like US, Europe and Japan. The
manufacturing process, for the high end UHP electrodes is
technology intensive and is a significant barrier for the
entry of new players.
Due to the global economic recession, demand for electrodes
is currently less than total installed capacity of 1.2
million MT, of which UHP capacity is
0.9 million MT. Global steel production continues to
recover post-recession.
The EAF method of manufacturing steel is becoming
increasingly attractive due to its low capital costs, lower
breakeven tonnage, and flexibility in locating plants closer
to consumption points and significantly lower pollution
levels than in the blast furnace steel plants. As a result,
EAF production has increased from 180 million tonnes in 1985
to 396 million MT in 2010
Graphite India Limited
31, Chowringhee Road, Kolkata 700 016
Unaudited Standalone Second Quarter Results for Fiscal 2012
(All amounts are in Lakhs of Indian Rupees, unless otherwise stated)
Particulars | Quarter ended 30th September | Half year ended 30th September | Year ended 31st M arch, 2011 (Audited) | |||
Particulars | 2011 | 2010 | 2011 | 2010 | Year ended 31st M arch, 2011 (Audited) | |
Gross Sale s/Income from Ope rati ons Le ss: Exci se Duty on Sale s Ne t Sale s/Income from Ope rati ons Othe r Ope rati ng Income Total Income Expe ndi ture (Incre ase )/de cre ase i n stock i n trade and work i n progre ss Consumpti on of raw mate ri als Consumpti on of store s and spare parts Purchase of trade d goods Employe e s cost Ele ctri ci ty charge s De pre ci ati on Othe r e xpe ndi ture T otal Profit from Operations before Other Income, Interest & Exceptional Items Othe r Income Profit before Interest & Exceptional Items Inte re st Profit after Interest but before Exceptional Items Exce pti onal i te ms- Payme nts unde r Voluntary Re ti re me nt Sche me Profit from Ordinary Activities before tax T ax e xpe nse (Ne t) (Note -6) - Curre nt - Earli e r Ye ars Net Profit from Ordinary Activities after tax Extraordi nary Ite m Net Profit for the period Pai d-up e qui ty share capi tal ( Face Value ` 2/- each ) Reserves excluding Revaluation Reserve Earnings P er Share (EP S) -Face Value ` 2/- each Basic EP S (`) Diluted EP S (`) Earnings P er Share (EP S) excluding Exceptional Items-Face Value ` 2/- each Basic EP S (`) Diluted EP S (`) Publi c share holdi ng - Numbe r of share s - Pe rce ntage of share holdi ng Promote rs and Promote r group share holdi ng a) Ple dge d/Encumbe re d - Numbe r of share s - Pe rce ntage of share s (as a % of the total share holdi ng of promote r and promote r group) - Pe rce ntage of share s (as a % of the total share capi tal of the company) b) Non-e ncumbe re d - Numbe r of share s - Pe rce ntage of share s (as a % of the total share holdi ng of the promote r and promote r group) - Pe rce ntage of share s (as a % of the total share capi tal of the company) | 47,919 1,763 46,156 - 46,156 3,700 16,741 5,162 - 2,227 4,172 989 6,595 39,586 6,570 112 6,682 250 6,432 - 6,432 2,280 (36) 4,188 - 4,188 3,908 2.14 2.14 2.14 2.14 78,138,736 39.99 - - - 117,236,858 100.00 60.01 | 33,904 1,518 32,386 - 32,386 (1,810) 14,317 3,447 - 1,936 3,152 984 2,898 24,924 7,462 1,365 8,827 85 8,742 1,273 7,469 2,550 - 4,919 - 4,919 3,908 2.74 2.52 3.22 2.95 84,808,735 43.41 - - - 110,566,859 100.00 56.59 | 81,388 3,380 78,008 - 78,008 1,806 31,149 9,326 - 4,289 8,094 1,974 9,640 66,278 11,730 803 12,533 514 12,019 - 12,019 4,180 -36 7,875 - 7,875 3,908 4.03 4.03 4.03 4.03 78,138,736 39.99 - - - 117,236,858 100.00 60.01 | 60,990 2,780 58,210 - 58,210 (3,147) 26,004 5,776 - 3,872 5,643 1,968 5,342 45,458 12,752 1,320 14,072 137 13,935 1,273 12,662 4,304 - 8,358 - 8,358 3,908 4.66 4.28 5.13 4.71 84,808,735 43.41 - - - 110,566,859 100.00 56.59 | 128,004 5,744 122,260 - 122,260 (12,222) 59,713 13,746 - 8,440 12,772 3,933 11,896 98,278 23,982 3,377 27,359 504 26,855 1,273 25,582 8,350 - 17,232 - 17,232 3,908 136,442 9.19 8.82 9.65 9.26 83,558,735 42.77 - - - 111,816,859 100.00 57.23 |
Graphite India Limited
31, Chowringhee Road, Kolkata 700 016
Unaudited Standalone Second Quarter Results for Fiscal 2012
(All amounts are in Lakhs of Indian Rupees, unless otherwise stated)
Segment Reporting as per Clause 41 of the Listing Agreement
( ` in La khs )
*
* afte r e xce pti onal i te m
7 | P a g eGraphite India Limited
31, Chowringhee Road, Kolkata 700 016
Notes :
Unaudited Standalone Balance Sheet as of September 30th, 2011 (All amounts are in Lakhs of Indian Rupees, unless otherwise stated)
1 State me nt of asse ts and li abi li ti e s -
( ` in L a kh s )
Particulars | As at 30th September | As at 31st M arch | |
Particulars | 2011 (Unaudited) | 2010 (Unaudited) | 2011 (Audited) |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 3,908 144,317 | 3,908 135,516 | 3,908 136,442 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 148,225 42,419 7,257 | 139,424 6,989 6,698 | 140,350 26,516 6,302 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 197,901 | 153,111 | 173,168 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 60,361 27,319 78,125 37,251 4,688 454 18,544 | 48,775 26,808 62,518 27,937 764 435 11,285 | 55,312 27,278 75,982 28,554 3,024 420 15,251 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 139,062 24,718 4,123 | 102,939 21,106 4,305 | 123,231 20,923 11,730 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 28,841 | 25,411 | 32,653 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 110,221 | 77,528 | 90,578 |
Share holde rs' Funds (a) Share Capi tal (b) Re se rve s and Surplus Loan Funds De fe rre d T ax Li abi li ty (Ne t) Total Fi xe d Asse ts Inve stme nts Curre nt Asse ts, Loans and Advance s (a) Inve ntori e s (b) Sundry De btors (c) Cash and Bank Balance s (d) Othe r Curre nt Asse ts (e ) Loans and Advance s Le ss: Curre nt Li abi li ti e s and Provi si ons (a) Li abi li ti e s (b) Provi si ons Ne t Curre nt Asse ts Total | 197,901 | 153,111 | 173,168 |
2 T he above re sults have be e n re vi e we d by the Audi t Commi tte e and approve d by the Board at i ts me e ti ng he ld on 14th Nove mbe r, 2011. T he Audi tors of the Company have carri e d out a Li mi te d Re vi e w of the fi nanci al re sults for the quarte r and the half -ye ar e nde d 30th Se pte mbe r, 2011 in te rms of Clause 41 of the Li sti ng Agre e me nt wi th Stock Exchange s.
3 Othe r e xpe ndi ture for the quarte r and the half-ye ar e nde d 30th Se pte mbe r, 2011 i nclude s e xchange loss of ` 1981 lak hs and ` 1714 lak hs re spe cti ve ly. Othe r Income for the corre spondi ng quarte r and the half-ye ar e nde d 30th Se pte mbe r, 2010 i nclude s e xchange gai n of ` 804 lak hs and ` 471 lak hs re spe cti ve ly. Such gai n for the ye ar e nde d 31st March, 2011 was ` 1252 lak hs.
4 Ge ne rati on of powe r at hydro e le ctri cal plants i s se asonal i n nature .
5 No i nve stor complai nt was pe ndi ng at the be gi nni ng of the quarte r. Duri ng the quarte r, te n complai nts we re re ce i ve d. All the complai nts we re di spose d off / atte nde d to and no complai nt was pe ndi ng as on 30th Se pte mbe r, 2011.
6 T ax e xpe nse - Curre nt compri se s curre nt tax and de fe rre d tax. T ax e xpe nse - Earli e r Ye ars re late s to fri nge be ne fi t tax.
7 Fi gure s for the pre vi ous ye ar/pe ri od have be e n re -groupe d / re -arrange d whe re ve r ne ce ssary.
By Orde r of the Board
For Graphi te Indi a Li mi te d
Place : Kolk ata
Date : 14th Nove mbe r, 2011
K.K.Bangur
Chai rman
8 | P a g e
