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DCW Ltd. Earnings Release 2020
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Earnings Release
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July 9, 2020
| DCWLIMITED | |||
|---|---|---|---|
| To,The BSE LIMITED1. | 2. | National Stock Exchange of India Ltd. | July 9, 2020 |
| Department of Corporate Services,1* floor, New Trading RingRotunda Building,Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai - 400 001.Fax : 22723121/3719/ 2037/2039Scrip Code :500117 | Exchange Plaza Bldg.5 Floor, Plot No.C-1'G' Block, Near Wockhardt,Bandra Kurla Complex,Mumbai 400 051.Fax:26598237/38Scrip Code : DCW. | ||
| Dear Sir/Madam,ReleaseSub:Press | including | Disclosureunder_SEBI__CircularSEBI/HO/CFD/CMDI/CIR/P/202/84 dated May 20, 2020 | _No. |
| Pursuant to the Regulation 30 of SEBI (Listing Obligations and Disdosure Requirement)Regulations, 2015, enclosed herewith is a copy of the Press Release to be distributed to themedia, contents of which are self-explanatory. | |||
| Further, this press release should also be considered as a disclosure under SEBI CircularNo. SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated May 20, 2020i.e. impactpandemiconentitieslisted19Requirements) Regulations, 2015. | under SEBI | Obligationsand(Listing | CoVID -ofDisclosure |
| This intimation is also being uploaded on the Company's website at www.dewltd.com. | |||
| You are requested to kindly take the same on record & oblige. | |||
| Thanking You, | |||
| Yours faithfully,al.For DCWGeneral Manager (Le}Membership No. ACS-22527 | -Company Secretary | ||
Sub: Press Release including Disclosure under __SEBI__Circular_ _No. SEBI/HO/CFD/CMDI/CIR/P/202/84 dated May 20, 2020
DCW LIMITED
HEAD OFFICE : "NIRMAL" 3RD FLOOR, NARIMAN POINT, MUMBAI-400 021. TEL.: 2287 1914, 2287 1916, 2202 0743 TELEFAX: 22 2202 8838 REGISTERED OFFICE : DHRANGADHRA - 363 315 (GUJRAT STATE) Email: [email protected], Website: www.dewltd.com, CIN-L24110GJ1939PLC000748
DCW LIMITED
CIN: L24110GJ1939PLC000748 Regd. Office: Dhrangadhra - 363 315, Gujarat State. Head Office: 3 Floor, Nirmal, Nariman Point, Mumbai - 400021 Tel: 022-22871914 Fax: 022-22028839 Website: www.dcwltd.com E-Mail: [email protected] ; investor [email protected]
DCW Limited announces Q4 & FY20 results
PRESS RELEASE
Mumbai, Thursday, 09 July 2020: DCW Limited ("the Compay" or "DCW"), specialty chemicals company headquartered in Mumbai, declared the financial results for the quarter and financial year ended on 31* March 2020 on Monday, 06" July 2020.
Impact due to Covid-19 on business operations-
The lockdown and several restrictions imposed on the movement of goods posed several challenges to the business of DCW limited towards the end of March 2020. The Company's operations were hit substantially during that period. The Company has gradually restarted factory operations since 15 April 2020, adhering to the safety norms prescribed by various authorities.
© Impact on financials:
Disruption in the supply chain, coupled with lockdowns imposed by the authorities, impacted production and logistics. This led to a revenue loss of ~ Rs. 550 Mn in Q4FY20. Without this, the revenue would have been in-line with revenue of Q4FY19, coupled with this adverse fluctuation in foreign currency due to COVID-19, which has resulted in depreciation of rupee against all major currencies has also affected, Q4 & FY20 EBITDA withouth this EBITDA Margins would have been in-line with FY19 EBITDA and EBITDA Margins.
Update on liquidity and moratorium
As per the moratorium facility announced by the central government, the company has availed the moratorium facility from 31° March 2020 as a precautionary measure to preserve the precious cash in hand. The company has sufficient liquidity in hand to cover all the liabilities and opex.
Employee Welfare:
The company has supported all the employees during this pandemic. The company has paid full wages and salaries to all employees during the lockdown period. The Company has also adopted Work from Home for all its office employees and other staff to minimize and contain the spread of COVID -19. The company also assisted all the migrant employees for their stay and food in the hostel premises while ensuring all the safety and social distancing norms. The Company is taking utmost care of its workforce like periodic sanitization, social distancing, mandatory mask-wearing, thermal check at the gates, maintaining hygienic conditions, etc.
Serving the society during the uncertain times:
DCW is highly committed to serving society, even during these uncertain times. The Company is assisting the local government by supplying Sodium Hypo Chlorite (WHO recommended disinfectant) to the local community around the Sahupuram plant for sanitization purposes helping fight the spread of COVID19.
During this period of lockdown, as a part of our Corporate Social Responsibility, plenty of activities were executed to safeguard the public not only in and around our factory but also covered the entire region, which harvested a lot of appreciation from the general public. DCW donated Personal Protective Equipments (PPEs) to local (Arumuganeri & Authoor) police stations and also distributed more than 4,000 packets of ration packets (consisting of wheat, dal, rice oil, etc.) to the poor helping the local villages around Sahupuram and Dhrangadhra in tackling the difficulties resulting from COVID19.
Financial Performance — Q4 & FY20
-
e Revenue from operations for FY20 stood at Rs. 12,858.9 Mn, compared to Rs. 13,528 Mn in FY-19, degrowth of 4.95%. Revenue from operations for Q4FY20 stood at Rs. 2,981.5 Mn, degrowth of 17% ona YoY basis, primarily due to COVID-19 related disruptions.
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e Without the COVID-19 related disruptions, the Q4FY20 financial and operating performance would have been significantly better.
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e EBITDA declined to Rs. 1,550 Mn for FY-20, compared to Rs. 1,665 Mn in FY-19. The EBITDA was impacted primarily due to
- o Factory shutdowns due to COVID-19
- o Significant impact on the pricing of finished products
- o Adverse forex movements during Q4FY20
- o Inventory valuation losses on the stock of finished products.
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e EBITDA for Q4FY20 stood at Rs.149.14 Mn compared to Rs.558.63 Mn in Q4FY19. EBITDA margin for Q4FY20 stood at 5% compared to 15.5% in Q4FY19. The decline in EBITDA margin was due to plant shutdowns and loss of revenue.
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e FY20 profit after tax fell to Rs. -267.6 Mn on a YoY basis from Rs. -42.7 Mn. Q4FY20 profit after tax fell 727% on a YoY basis to Rs. -267.62 Mn. Cash PAT for FY20 stood at Rs. 614.12 Mn. The profitability for FY20 was impacted due to the following reasons -
-
o The finance cost for FY20 stood at Rs. 1,075 Mn., an increase of 3.3% on a YoY basis.
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o A higher depreciation charge in FY20 stood at Rs 872 Mn. compared to FY19 of Rs 834 Mn., an increase of 4.6% ona YoY basis.
Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Ltd., said, "This pandemic impacted our operations and supply chain towards the end of the quarter. Nonetheless, we are looking at this as an opportunity to strengthen our capabilities and revisit our growth and value creation strategies. We have resumed our plant operations from the mid of April and currently operating at the best possible capacity considering difficulties caused due to social distancing norms. The company has undertaken various cost reduction initiatives, cash flow control measures and periodic reviews of receivables and order book. The company has not witnessed any additional risk to recover assets like inventories, investments, and receivables due to various risk mitigation strategies implemented by the company. We have not seen any impact on internal financial controls as well. The Company is well-positioned to fulfill its obligations and also does not foresee any significant impact on the business due to the non-fulfillment of the liabilities by any party.
We are following all the rules and regulations laid out by the local, state, and central authorities. We have sufficient liquidity and workforce to scale up the operations as the demand picks up, and social distancing norms are relaxed. We will continue to monitor the order book and ensure swift plant operations while focusing on efficient raw material sourcing, liquidity, reduction in the opex, and employee health." Q4&FY20 Financial Highlights —
| (in Rs. Mn) | ||||||
|---|---|---|---|---|---|---|
| Particulars | Q4FY20 Q4FY19 | YoY% | FY20 | FY19 | YoY% | |
| Revenue | 2,981.5 3,594.1 | -17% | 12,858.9 13,564.0 | -5% | ||
| EBITDA | 149.4 | 558.6 | -73% | 1,551 | 1,655 | -6% |
| EBITDA Margin (%) | 5.0% | 15.5% -1050bps | 12.1% | 12.2% | -10bps | |
| Profit After Tax (PAT) | -250.6 | 149.1 | -268% | -267.6 | -42.7 | -527% |
| PAT Margin (%) | -8.4% | 4.1% | -1250bps | -2.1% | -0.3% | 180bps |
Financial Performance — Specialty Chemicals Division — Q4 & FY20
The company's commodity chemical division consists of SIOP and C-PVC. The company is one of the few large-scale synthetic iron oxide manufacturers for red and yellow pigments. The company is the only C-PVC manufacturer in India. The company's specialty chemicals facility is based out of Sahupuram, Tamil Nadu.
The company is focusing on increasing the revenue mix from specialty chemicals. The revenue mix between Commodity Chemicals: Specialty Chemicals for FY20 stood at 11%:89% % compared to 8%:92% in FY19.
SIOP Division
- Revenue for FY20 stood at Rs. 407.4 Mn, a robust growth of 22% on a YoY basis. Revenue for Q4FY20 stood at Rs. 150.5 Mn, compared to Rs. 78.7 Mn in Q4FY19.
- EBIT for FY20 stood at Rs. -14.68 Mn, a growth of 72% on a YoY basis. EBIT for Q4FY20 stood at Rs. -2.54 Mn, compared to Rs. -19.76 Mn in Q4FY19.
- The revenue growth in SIOP was primarily due to the debottlenecking of the capacities.
C-PVC Division
- Revenue for FY20 stood at Rs. 1,033.1 Mn, a robust growth of 25% on a YoY basis. Revenue for Q4FY20 stood at Rs. 217.9 Mn, compared to Rs. 224.4 Mn in Q4FY19. Q4&FY20
- EBIT for FY20 stood at Rs. 295.1 Mn, a growth of 119% on a YoY basis. EBIT for Q4FY20 stood at Rs. 61.1 Mn, compared to Rs. 27.6 Mn in Q4FY19.
- The revenue growth is attributed to favorable government policies like anti-dumping duty and robust domestic demand.
Financial Highlights —
| SIOP Division | ||||||
|---|---|---|---|---|---|---|
| Revenue forFY20 stood | 407.4Rs.at | Mn,a | robust growth | of 22% ona | YoYbasis. | |
| Revenue for Q4FY20 stood at Rs. 150.5 Mn, compared to Rs. 78.7 Mn in Q4FY19. | ||||||
| EBIT for FY20 stood at Rs. -14.68 Mn, a growth of 72% on a | YoY basis. EBIT for Q4FY20 | |||||
| stood at Rs. -2.54 Mn, compared to Rs. -19.76 Mn in Q4FY19. | ||||||
| The revenue growth in SIOP was primarily due to the debottlenecking of the capacities. | ||||||
| C-PVC Division | ||||||
| Revenue for FY20 stood at Rs. | 1,033.1 Mn, a | robust growth of 25% on a YoY basis. | ||||
| Revenue for Q4FY20 stood at Rs. 217.9 Mn, compared to Rs. 224.4 Mn in Q4FY19. | ||||||
| EBIT for FY20 stood at Rs. 295.1 Mn, a growth of 119% on a YoY basis. EBIT for Q4FY20stood at Rs. 61.1 Mn, compared to Rs. 27.6 Mn in Q4FY19. | ||||||
| The revenue growth is attributed to favorable government policies like anti-dumping | ||||||
| duty and robust domestic demand. | ||||||
| Q4&FY20Financial Highlights — | ||||||
| (in Rs. Mn) | ||||||
| Q4FY20 Q4FY19 YoY% | FY20 | FY19 | YoY% | |||
| SIOP | ||||||
| Revenue | 150.5 | 78.7 | 91% | 407.4 | 333.4 | 22% |
| EBIT | -2.5 | -19.8 | -87% | -14.7 | -53.4 | -72% |
| EBIT Margin (%) | -2% | -25% | - | -4% | -16% | - |
| C-PVC | ||||||
| Revenue | 217.9 | 224.4 | -3% | 1033.1 | 825.7 | 25% |
| EBIT | 61.1 | 27.6 | 121% | 295.1 | 134.6 | 119% |
| EBIT Margin (%) | 28% | 12% | - | 29% | 16% | - |
Financial Performance — Commodity Chemicals Division — Q4 & FY20
The company's commodity chemical division consists of Caustic Soda, Soda Ash and PVC. Soda Ash facility is based out of Dhragandhra, Gujarat, while Caustic Soda and PVC facilities are based out of Sahupuram, Tamil Nadu.
Caustic Soda Division:
- e Revenue for FY20 stood at Rs. 4,704.9 Mn, modest degrowth of 1% on a YoY basis. Revenue for Q4FY20 stood at Rs. 1058.6 Mn, compared to Rs. 1515.5 Mn in Q4FY19.
- e BIT for FY20 stood at Rs. 843 Mn, a growth of 9% on a YoY basis. The increase in EBIT is largely attributed to operating leverage and various cost reduction initiatives by the Company.
Soda Ash Division
- e Revenue for FY20 stood at Rs. 2,000.5 Mn compared to Rs. 2,130.0 Mn on a YoY basis. Revenue for Q4FY20 stood at Rs. 426.89 Mn, compared to Rs. 548.67 Mn in Q4FY19.
- e BIT for FY20 stood at Rs. 425.89, degrowth of 20% on a YoY basis. EBIT for Q4FY20 stood at Rs.77.61 Mn, compared to Rs. 127.52 Mn in Q4FY19.
PVC Division
- e Revenue for FY20 stood at Rs. 4,564.9 Mn, degrowth of 15% on a YoY basis. Such degrowth was led by loss in production on account of Covid-19 related shutdowns and softening of prices during the later period of FY20. Revenue for Q4FY20 stood at Rs. 1100.27 Mn, compared to Rs. 1203.34 Mn in Q4FY19.
- e BIT for FY20 stood at Rs. (109.51) Mn, degrowth of (188.3)% on a YoY basis. EBIT for QAFY20 stood at Rs. (77.49) Mn, compared to Rs. 87.79 Mn in Q4FY19.
Q4&FY20 Financial Highlights —
| Soda Ash Division | ||||||
|---|---|---|---|---|---|---|
| Revenue for FY20 stood at Rs. 2,000.5 Mn compared to Rs. 2,130.0 Mn on a YoY basis.e | ||||||
| Revenue for Q4FY20 stood at Rs. 426.89 Mn, compared to Rs. 548.67 Mn in Q4FY19. | ||||||
| BIT for FY20 stood at Rs. 425.89, degrowth of 20% on a YoY basis. EBIT for Q4FY20estood at Rs.77.61 Mn, compared to Rs. 127.52 Mn in Q4FY19. | ||||||
| PVC Division | ||||||
| Revenue forFY20 stood ate | Rs. 4,564.9 | Mn, | degrowth | of 15% | a YoY basis.on | Such |
| degrowth was led by loss in production on account of Covid-19 related shutdowns and | ||||||
| softening of prices during the later period of FY20. Revenue for Q4FY20 stood at Rs. | ||||||
| 1100.27 Mn, compared to Rs. 1203.34 Mn in Q4FY19. | ||||||
| BIT for FY20 stood at Rs. (109.51) Mn, degrowth of (188.3)% on a YoY basis. EBIT fore | ||||||
| QAFY20 stood at Rs. (77.49) Mn, compared to Rs. 87.79 Mn in Q4FY19. | ||||||
| Q4&FY20Financial Highlights — | ||||||
| (in Rs. Mn) | ||||||
| Caustic Soda | Q4FY20 Q4FY19 | YoY% | FY20 | FY19 | YoY% | |
| Revenue | 1058.6 | 1515.5 | -30% | 4704.9 4776.1 | -1% | |
| EBIT | 78.6 | 457.8 | -83% | 843.0 771.8 | 9% | |
| EBIT Margin (%) | 7% | 30% | - | 18% | 16% | - |
| Soda Ash | ||||||
| Revenue | 426.9 | 548.7 | -22% | 2000.5 2145.5 | -7% | |
| EBIT | 77.6 | 127.5 | -39% | 425.9 534.0 | -20% | |
| EBIT Margin (%) | 18% | 23% | - | 21% | 25% | - |
| PVC | ||||||
| Revenue | 1100.3 | 1203.3 | -9% | 4564.9 5345.8 | -15% | |
| EBIT | -77.5 | 87.8 | -188% | -109.5 165.9 | -166% |
About DCW
DCW is a specialty chemicals company, manufacturing PVC, C-PVC (chlorinated polyvinyl! chloride), Caustic Soda, Soda Ash, and Synthetic Iron Oxide Pigment (SIOP). The Company is the only domestic manufacturer C-PVC, a versatile thermoplastic used mainly for manufacturing hot and cold-water pipes, industrial liquid handling, and a wide range of products serving a variety of applications. DCW's Caustic Soda, SIOP and PVC Units are in close proximity to the Tuticorin Port in Tamil Nadu, giving the Company a competitive edge over its peers to export its products to global markets.
For more information please contact:
Mr. Dilip Darji General Manager (Legal) & Company Secretary DCW Limited Landline: +91 22 22871914/16 [email protected]
Mr. Chinmay Madgulkar Consultant - Dickenson World Mob: + 91 98600 88296 [email protected]
Safe Harbour: This document may contain forward-looking statements about the Company, which are based on the beliefs, opinions, and expectations of the Company's management as the date of this press release and the companies do not assume any obligation to update their forward-looking statements if those beliefs, opinions, expectations, or other circumstances should change, These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Consequently, readers should not place any undue reliance on such forwardlooking statements.