Chemanex suffers worst year in over a decade

• Group posts after-tax loss of Rs. 10.6 m; profit for equity holders down 84% to Rs. 6 m
  
   
• Other income of Rs. 92 m salvages company from disastrous result

• Exports inflicted with Rs. 66.7 m loss

• Final dividend of 75 cents proposed on top of interim of an equal amount paid

Chemanex Plc in 2011/11 had suffered its worst performance in over a decade, posting an after-tax Group loss of Rs. 10.6 million, whilst net profit attributable to equity holders dropped by 84% to Rs. 6 million.

Group revenue was also down by 7% to Rs. 931 million, whilst gross profit dipped by 17% to Rs. 155 million. Pre-tax profit plunged by 84% to Rs. 10.6 million. The results would have been worse if not for Rs. 92 million in other income, up by 42% over the 2010/11 financial year.

Other income came from Rs. 38.6 million as net foreign exchange gain and interest income of Rs. 31.6 million, though the latter was marginally down from 33.5 million in FY11. Income from quoted investments chipped in with Rs. 7.4 million up from Rs. 513,000 whilst that from unquoted was down to Rs. 6 million from Rs. 12 million. Chemanex also gained Rs. 4.8 million from disposal of property, plant and equipment, up from Rs. 2.3 million. At company level, after-tax profit dipped by 59% to Rs. 33 million from Rs. 81 million in FY11.

Chemanex’s liners business has resulted in a loss of Rs. 31.3 million in comparison to a profit of Rs. 10.6 million in FY11.  Core business chemicals had suffered a pre-tax loss of Rs. 13 million, as against a profit of Rs. 8.5 million last year.

The paint business, the second biggest, had improved a profit of Rs. 9.45 million, up from Rs. 5.4 million in the previous year. Consumer business too has brought in Rs. 6.7 million, a sharp rise from Rs. 1.6 million in the previous year.

Chemanex also saw export business suffering a loss of Rs. 66.7 million, as opposed to a profit of Rs. 10 million in FY11. Export turnover dropped to Rs. 266 million, from Rs. 458 million.

On the cost side, all items have increased as well. Administrative expenses rose to Rs. 139 million from Rs. 123.5 million and distribution expenses rose to Rs. 48 million from Rs. 39.3 million. Other operating expenses rose sharply from Rs. 13.2 million to Rs. 27.5 million, whilst financing expenses doubled to Rs. 21.6 million.

Despite the worst performance, the Chemanex Board last week recommended a final dividend of 75 cents, same as the interim dividend paid in February this year. The final dividend cost will be Rs. 11.8 million, bringing the total to Rs. 23.6 million, down from Rs. 31.5 million (Rs. 2 per share dividend paid last year).

Revenue reserves were at Rs. 676 million at Company level and Rs. 785.6 million at Group level, whilst total equity amounted to Rs. 1.12 billion and Rs. 1.36 billion respectively.

Net asset per share had marginally improved to Rs. 71.52 from Rs. 71.18 in the previous year, whilst at Group level it had dipped to Rs. 78.67 from Rs. 81.12

CIC Holdings Plc owns a 50.4% stake in Chemanex whilst CIC Trustees for Charitable and Education Trust Fund holds 10.3%. Connected parties control a 64% stake in Chemanex and public holding is 36%.

 

 

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