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For the quarter ended September 2005 Asahi India Glass has suffered heavily due to shut down its float glass plant on account of floods. But even the automotive glass division has reported fall in profitablity.
Asahi India Glass is a joint venture between the Labroo family, Asahi Glass Co of Japan, and Maruti Udyog. Asahi India Glass had begun its operations in 1987. The company is today is the leading glass manufacturer in India. It manufacturers wide range of international quality automotive safety glass and float glass.
Quarterly Analysis
For the quarter ended September 2005 Asahi India Glass sales stood at Rs 154.57 crore which was 2% higher as compared to corresponding quarter in previous year. As a percentage of sales power & fuel cost have decline from 15.75% to 12.11%. However as a percentage of sales raw material cost, staff cost, other expenses and store & spare cost increase to 29.48%, 7.75%, 24.59% and 5.83% respectively (previous year: 28.55%, 6.18%, 22.57% and 5.55%). As a result operating profit margin have eased by 340 basis points from 20.5% to 17%. Thus operating profit has tumble by 16% to Rs 26.4 crore.
Provision for depreciation has increased by 31% to Rs 14.41 crore. Fall in other income by 61% to Rs 0.34 crore coupled with increase in interest expenses by 642% to Rs 2.21 crore have lead to 51% decline in PBT to Rs 10.12 crore. Company has an EO of Rs 9.26 crore. Thus PBT after EO has decline by 96% to Rs 0.86 crore. Provision for tax including FBT have decline by 75% to Rs 0.41 crore. PAT for the quarter stood at Rs 0.44 crore recording a decline of 98%.
Half yearly Analysis
Revenue for the half year ended September 2005 ended stood at Rs 308.36 crore, up by 8%. As a percentage of sales, power & fuel cost have decline from 15.54% to 14.16% and other expenses have decline from 22.74% to 21.41%. However as a percentage of sales, raw material cost, staff cost and store & spare cost increase to 30.07%, 7.24% and 6.49% respectively (previous year: 29.42%, 6.44% and 5.67%). As a result operating profit margin have eased by 80 basis points from 19.2% to 20%. Nevertheless, benefits of sales growth has percolated to profitability thus company reported a growth of 4% to Rs 59.11 crore.
Other income has fallen by 16% to Rs 1.4 crore. Interest expenses have shoot up by 558% to Rs 4.5 crore. Provision for depreciation has increased by 24% to 27.73 crore. Thus PBT before EO reported a decline of 21% to Rs 28.28 crore. Company has an EO of Rs 9.27 crore. Thus PBT after EO has decline by 47% to Rs 19 crore. Provision for tax including FBT have decline by 22% to Rs 2.17 crore. PAT for the period stood at Rs 16.83 crore recording a decline of 49%.
Yearly Analysis
For the year-end March 2005, Asahi India Glass has managed to grow its volumes but margins have fallen down. As a result, the 20% rise in sales to Rs 588.67 crore saw its OPM falling from 23.9% to 20.6% leading to a fall of 330 basis. The operating profit grew by 4% at Rs 121.45 crore. The other income declined by 50 basis points at 7.41 crore. Other income dipped by 50% to Rs 7.41 crore
The interest expense for the year increased by 31% at 3.16 crore. The depreciation expense declined by 21% at 40.43 crore as a result of which Profit before tax stood at 85.27 crore up 9%. The provision for tax increased by 8% at Rs 78.49 crore. Thus PAT finally was up 8% at Rs 78.21 crore.
Segment Results
Quarterly Analysis
For the quarter ended September 2005 the Net Sales/ Income from operations from all segments increased by 3% to Rs 160.8 crore.
Automotive Glass
For the quarter ended September 2005 the Automotive Glass business showed a growth in revenue by 12% to Rs 93.82 crore as compared to quarter ended September 2004. PBITA margins for the segment fallen by 340 basis points to 13.5%. As a result the PBITA have decline by 10% to Rs 12.66 crore. This segment contributes 58% of the total sales revenue for the company.
Float glass
For the quarter ended September 2005 the Float Glass business showed a fall in revenue by 9% to Rs 65.25 crore as compared to quarter ended September 2004. The company has incurred a loss of Rs 5.7 crore as compare to profit of Rs 6.58 crore in corresponding quarter in previous year. This segment contributes 41% of the total sales revenue for the company.
Half yearly Analysis
For the half year ended September 2005 the Net Sales/ Income from operations from all the segments increased by 11% to Rs 322.51 crore.
Automotive Glass
For the half-year ended September 2005 the Automotive Glass business showed a growth in revenue of 19% to Rs 185.96 crore as compared to half year ended September 2004. PBITA margins for the segment reported a fall of 370 basis points to 14.4%. As a result PBITA decline by 6% to Rs 26.8 crore. This segment contributes 58% of the total sales revenue for the company.
Float glass
For the half-year ended September 2005 the Float glass business revenue has remained almost flat at Rs 134.06 crore as compared to half year ended September 2004. PBITA has decline by 92% to Rs 13.22crore. This segment contributes 42% of the total sales revenue for the company.
Yearly Analysis
For the year ended March 2005 the Net Sales/ Income from operations from all the segments increased by 18% to Rs 514.73 crore.
Automotive Glass
For the year ended March 2005, automotive unit grew by 18% to Rs 329.01 crore and it accounted for 54% of the total revenue. PBIT margins for the same declined 110 basis points to 16.4 % accounting for 60% of the total PBIT.
Float glass
Revenues from float glass unit grew by 19% to Rs 279.23 crore (46% of total). PBIT increased by 64% to Rs 33.45 crore. PBIT margins of float glass rose by 330 basis points to 12%.
Recent Developments
On July 26, 2005, the unrelenting and unprecedented rainfall in Maharashtra caused major flooding in float glass plant at Taloja, resulting in shutdown of the plant. The Company took this adverse situation as an opportunity and pre-poned hot repair of furnace, which would otherwise have been undertaken two years later. The hot repair of furnace and refurbishment of metal bath has since been completed and the plant has commenced commercial production in early November. Operating income in FY 2005-06 will be impacted by flood losses which are estimated to be Rs. 40 crore.
The company is moving ahead with it expansion plans as per its schedule. The architectural processing facilities is being set up at it Chennai and Rewari Plants. The company is also adding tempering and laminated capacities at its Auto Glass Plant at Chennai this fiscal. Post expansion, the Chennai Plant will have a capacity of one million laminated windshields and one million tempered car sets. Project work at Asahi India Glass’s Integrated Glass Plant at Roorkee in Uttaranchal is progressing as per schedule
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