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In the quarter ended March 2006 Asahi India Glass (AIS) has reported 1% increase in net sales to Rs 157.85. The operating profit margin has improved by 20 basis points to 20.8%. The company during the quarter has changed depreciation policy of its Auto Glass SBU. This has led to 73% fall in provision for depreciation. The company has also written back depreciation of earlier years amounting to Rs. 40.08 crore. Thus, net profit of the company has zoomed by 219% to Rs 66.95 crore.
AIS is a joint venture between the Labroo family, Asahi Glass Co of Japan and Maruti Udyog. It is a leading glass company in India; manufacturing automotive safety glass, float glass, architectural processed glass and glass products.
Quarterly Results
For the quarter ended March 2006 AIS has reported marginal 1 % increase in net sales to Rs 157.85 crore. The operating profit margin of the company has improved by 20 basis points to 20.8% due to fall in cost of stores & spares consumed and other expenses. As a percentage of sales (net of stock adjustment) other expenses and cost of stores & spares consumed has fallen to 20.06% and 4.73% respectively. (Last year: 23.54% and 5.43%). However materials cost, power & fuel and staff cost as a percentage of sales has increased to 34.91%, 14.13% and 7% respectively. (Last year: 31.05%, 13.12 and 6.45%). Operating profit of the company has increased by 1% to Rs 32.82 crore.
Other income has decline by 18% to Rs 3.2 crore (Other income includes foreign exchange of Rs 1.11 crore. In corresponding quarter in previous year company had incurred foreign exchange loss of Rs 0.67 crore.) Due to fall in other income PBIDT decline by 1% to Rs 36.02 crore. Interest expenses has shoot up by 95% to Rs 3.62 crore. Provision for depreciation of the company has decline by whooping 73% to Rs 3.05 crore on account of change in depreciation policy in the Auto Glass SBU. (Depreciation includes deferred revenue expenditure written off amounting to Rs 0.03 crore in the quarter-ended March 2005 and quarter ended March 2006). PBT before EO stood at Rs 29.35 crore as compared to Rs 23.14 crore in corresponding quarter in previous year, up by 27%.
In the quarter ended March 2006 Company has written back depreciation of earlier years amounting to Rs. 40.08 crore. Company had also reversed impairment loss amounting to Rs 0.38 crore. Company had a non-recurring expenses of Rs 0.35 crore. Thus Company during the quarter had a net extraordinary income of Rs 40.11 crore. In corresponding quarter in previous company had no extraordinary item.
On account of extraordinary income PBT after EO has shoot up by 200% to Rs 69.46 crore.
Provision for tax has increased by 34% to Rs 2.44 crore. In the quarter ended March 2006 there was a prior period adjustment of Rs 0.06 crore in the corresponding quarter in previous year company had a prior period adjustment of Rs 0.36 crore (including prior period tax Rs 0.08 ).
Finally, PAT of the company stood at Rs 66.95 crore posting a growth of 219%. Surge in profits has been on account of change in depreciation policy.
Yearly results
For the year ended March 2006 AIS sales has remain flat at Rs 587.67 crore. Operating profit margin of the company has also decline from by 30 basis points to 20.3%. This resulted from rise in materials cost, stores & spares cost and staff cost as a percentage of sale to 32.45%, 5.89% and 7.22% respectively. (Last year: 29.95%, 5.53% and 6.59% ).However as a percentage of sales other expenses and power & fuel cost has fallen to 20.33% and 14.18%.(Last year: 22.01% and 14.98%). Due to fall in margins operating profit of the company has decline by 2% to Rs 119.27crore.
Other income has decline whooping 81% to Rs 1.41 crore (Other income for the year includes exchange rate loss of Rs 2.24 crore.) Due to sharp fall in other income PBIDT decline by 6% to Rs 120.68 crore.
Interest expenses have increased by whopping 243% to Rs10.83 crore. Provision for depreciation of the company has increased by 15% to Rs 46.5 crore. (Depreciation includes deferred revenue expenditure written off amounting to Rs 0.12 crore in the year ended March 2005 and year ended March 2006) The Company during the year has change in depreciation policy in the Auto Glass SBU. The change in depreciation policy has resulted in a lower depreciation charge for the year by Rs. 14.76 crore. PBT before EO has decline by 26% to Rs 63.35 crore.
In the year ended March 2006 Company has written back depreciation of earlier years amounting to Rs. 40.08 crore. Company had also reversed impairment loss amounting to Rs 0.38 crore. Company had non-recurring expenses of Rs 12.44 crore. Thus Company during the year had a net extraordinary income of Rs 28.01crore. Last year there was no extraordinary item.
Due to extraordinary income PBT after EO has posted a growth of 7% to Rs 91.36 crore. Provision for tax has fallen by 26% to Rs 4.97 crore. In the year ended March 2006 there was a prior period adjustment amounting to Rs 0.13 crore as compared to Rs 0.36 crore in last year. (Including prior period tax Rs 0.08). Finally, PAT of the company stood at Rs 86.26 crore as compared to Rs 78.2 crore reporting a growth of 10%.
Commenting on the results, Mr. Sanjay Labroo, Managing Director & CEO of AIS said, "The year 2005-06 has been one of the best years in AIS history. Though AIS’s operating profits fell drastically this year, team AIS showed its mettle by fighting back against the adversity the Company faced at its Float Glass Plant at Taloja, which remained shut for over 3 months due to flooding. Besides the flood losses, increase in prices of certain input costs like oil, glass and other raw materials impacted AIS’s profitability. However, the underlying performance of AIS was vastly better. "
Full Year Consolidated Results
AIS’s consolidated net sales have remained flat at Rs 591.22 crore. The operating profit margin has fallen by 30 basis points to 20.1%. Due to fall in margins operating profit has fallen by 1% to Rs 119.07 crore. Fall in other income by 80 to Rs 1.46 crore and increase in interest expenses by 246% to Rs 10.91 crore has lead to 12% fall in PBDT. Provision for depreciation has increased by 15% to Rs 46.7 crore. PBT before EO has fallen by 25% at Rs 62.92 crore. Fall in provision for tax by 25% to Rs 5.01 crore coupled with extraordinary income of Rs 28.01 crore has accelerated PAT growth to 11%.
Segment Results
Quarterly Results
Automotive Glass
For the quarter ended March 2006 the automotive glass business showed a growth in revenue of 13% to Rs 101.8 crore. PBIT margins for the segment have improved sharply from 14.88% to 64.02% due to change in depreciation policy of the division. As a result the PBIT have zoomed by 388% to Rs 65.17 crore. This segment contributes 63% of the total sales revenue for the company.
Float glass
For the quarter ended March 2006 the float glass business showed a fall in revenue of 27% to Rs 55.30 crore. PBIT margins for the segment fallen from 15.53% to 14.1%. Due to fall in revenue and margins PBIT has decline by 34% to Rs 7.8 crore. This segment contributes 34% of the total sales revenue for the company.
Yearly results
Automotive Glass
For the year ended March 2006 the automotive glass segment has posted a growth in revenue of 13% to Rs 370.59 crore. PBIT margins for the segment improved from 16.33% to 27.29% due to change in depreciation policy. As a result the PBIT have zoomed by 88% to Rs 101.12 crore. This segment contributes 61% of the total sales revenue for the company.
Float glass
For the year ended March 2006 the float glass business showed a fall in revenue by 18% to Rs 227.9 crore on account of shut down of float glass plant at Taloja. PBIT margins for the segment fallen from 11.95% to 4.57%. On account of fall in margins and revenue PBIT has decline by whooping 69% to Rs 10.41 crore. This segment contributes 37% of the total sales revenue for the company.
Recent Developments
The company has completed the projects scheduled in the financial year 2005-06 on time. It has added capacities for tempered glass and laminated windshields at the Auto Glass Plant at Chennai. The Architectural Processing Units at the Auto Glass Plants in Chennai and Rewari became operational in January 2006 and March 2006. The project work at the Integrated Glass Plant at Roorkee in the State of Uttaranchal is proceeding as per schedule. The Plant will become operational by December 2006.
The Board of Directors of the company has recommended a final dividend of 60% on for the financial year 2005-06.
The promoters holding stood at 44.66% as on March 2006 as against 44.39% in the corresponding quarter in previous year.
On 16th May 2006 AIS closed at Rs 96.25 on BSE
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