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Results
03-Aug-22
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Analysis
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Deepak Nitrite
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PBIT margin down 1170 bps to 15.5%
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Deepak
Nitrite consolidated net sales increased 34.84% to Rs 2057.99 crore in Q1FY23
compared Q1FY22. Sales of Phenolics
segment has gone up 33.62% to Rs 1,334.93 crore (accounting for 64.65% of total
sales). Sales of Advanced Intermediates
segment has gone up 38.45% to Rs 729.98 crore (accounting for 35.35% of total
sales). Inter-segment sales rose from Rs
0.11 crore to Rs 6.92 crore.
Profit
before interest, tax and other unallocable items (PBIT) has slumped 22.75% to
Rs 320.44 crore. PBIT of Phenolics
segment fell 34.64% to Rs 187.74 crore (accounting for 58.59% of total
PBIT). PBIT of Advanced Intermediates
segment rose 4.05% to Rs 132.70 crore (accounting for 41.41% of total PBIT).
PBIT
margin of Phenolics segment fell from 28.75% to 14.06%. PBIT margin of Advanced Intermediates segment
fell from 24.19% to 18.18%. Overall PBIT
margin fell from 27.18% to 15.52%.
Operating
profit margin has declined from 29.58% to 17.30%, leading to 21.16% decline in
operating profit to Rs 355.98 crore. Raw
material cost as a % of total sales (net of stock adjustments) increased from
56.44% to 67.27%. Employee cost
decreased from 4.25% to 3.81%. Other
expenses rose from 11.47% to 12.20%.
Power and Oil fuel cost rose from 5.49% to 6.26%.
Other
income rose 16.48% to Rs 9.61 crore.
PBIDT fell 20.48% to Rs 365.59 crore.
Provision for interest fell 21.48% to Rs 8.59 crore.
PBDT
fell 20.46% to Rs 357 crore. Provision
for depreciation fell 3.86% to Rs 41.88 crore.
Profit
before tax down 22.24% to Rs 315.12 crore.
Provision for tax was expense of Rs 80.5 crore, compared to Rs 102.62
crore. Effective tax rate was 25.55% compared
to 25.32%.
On
June 02, 2022, an incidence of fire occurred around the warehouse section of
company`s one of the manufacturing sites located at Nandesari, Gujarat. This
incident led to damage of certain property, plant and equipment, inventory and
has interrupted business. Upon receiving directions from various authorities,
operations have been resumed in a phased manner at entire plant at Nandesari
except for affected areas of Nitrite section for which the company is on its
way to complete the activities at the
soonest possible time frame. The company
is adequately insured for reinstatement value of damaged assets and loss of
profits due to business interruption. The company has lodged claim of this
incident with the insurance company and the survey is currently ongoing.
The
company has estimated and recognised an initial loss of Rs 47.20 crore on
account of damage to certain property, plant and equipment & inventory and
has recognised insurance claim receivable to the extent of aforesaid losses.
Further, the company is in the process of determining final claim for
reinstatement of assets based upon estimated cost. The aforementioned losses
and corresponding credit arising from insurance claim receivables has been
presented on a net basis (Rs Nil) under exceptional Items in the above results
for the quarter ended June 30, 2022.
Net
profit attributable to owners of the company decreased 22.47% to Rs 234.62
crore.
Promoters’
stake was 45.72% as of 30 June 2022 ,compared to 45.69% as of 30 June 2021.
The
Group has planned introduction of several downstream chemicals and complex
chemical platforms which shall significantly diversify its operations adding to
the existing wide range of value-added product mix. It has significant presence
in value chain from basic intermediates to fine and speciality products to
performance products through integrated
operations with processes
ranging from manufacturing
basic intermediates to
niche and complex intermediates, leading to high
dependency on each other as most of the products are forward-backward
integrated, serving varied end-user industries across all the geographies. This
gives flexibility to focus on manufacturing products that enjoy encouraging
demand and offer better price. Further, over the period of time, the business
scenario and macro-economic conditions have changed.
Owing
to increasing number of facilities catering multi products, integrated
production processes, similar economic characteristics of
products and business
scenario, the Chief
Operating Decision Maker
(CODM) evaluates the performance of the Group as two business
segments and allocates resources based on value generated from these
segments, as compared
to four business
segments reported earlier
in Consolidated financial
results (Basic Intermediates, Fine & Speciality chemicals,
Performance Products and Phenolics). Accordingly, the operations of the Group
are reported under two business segments from the quarter ended June 30, 2022
and has re-casted comparative periods to confirm to the way the Group
internally manages and monitors segment performance: a) Advanced Intermediates
and b) Phenolics
Full
year results analysis
Net
sales of Deepak Nitrite has increased 56.02% to Rs 6802.19 crore. Phenolics segment sale at Rs 4,303.42 crore
accounted for 63.15% of total sales.
Advanced Intermediates sale at Rs 2511.05 crore accounted for 36.85% of
total sales.
Profit
before interest, tax and other unallocable items (PBIT) of the company was Rs
1,462.84 crore. PBIT of Phenolics
segment at Rs 867.11 crore accounted for 59.28% of total PBIT. PBIT of Advanced Intermediates at Rs 595.73
crore accounted for 40.72% of total PBIT.
PBIT
margin of Phenolics segment was 20.15% while advanced intermediates PBIT margin
was 23.7%. Overall PBIT margin was
21.47%.
Operating
profit margin has declined from 28.60% to 23.57%, leading to 28.59% rise in
operating profit to Rs 1,603.58 crore.
Raw material cost as a % of total sales (net of stock adjustments)
increased from 52.05% to 61.04%.
Employee cost decreased from 5.65% to 3.97%. Other expenses fell from 13.76% to
11.74%. Power and Oil fuel cost rose
from 6.06% to 6.36%.
Other
income rose 98% to Rs 42.61 crore. PBIDT
rose 29.77% to Rs 1646.19 crore.
Provision for interest fell 54.12% to Rs 34.04 crore. Loan funds declined from Rs 589.74 crore as
of 31 March 2021 to Rs 315.03 crore as of 31 March 2022. Inventories rose to Rs 584.55 crore as of 31
March 2022 from Rs 382.69 crore as of 31 March 2021. Sundry debtors were higher at Rs 1,129.06
crore as of 31 March 2022 compared to Rs 756.30 crore as of 31 March 2021. Cash and bank balance rose to Rs 41.79 crore
as of 31 March 2022 from Rs 33.43 crore as of 31 March 2021. Investments rose to Rs 439.02 crore as of 31
March 2022 from Rs 189.29 crore as of 31 March 2021 .
PBDT
rose 34.98% to Rs 1612.15 crore.
Provision for depreciation rose 16.43% to Rs 177.7 crore. Fixed assets declined from Rs 2,042.45 crore
as of 31 March 2021 to Rs 2,036.37 crore as of 31 March 2022. Intangible assets increased from Rs 41.73
crore to Rs 49.29 crore.
Profit
before tax grew 37.70% to Rs 1,434.45 crore.
Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 367.81
crore, compared to Rs 265.91 crore.
Effective tax rate was 25.64% compared to 25.53%.
Net
profit attributable to owners of the company increased 37.49% to Rs 1,066.64
crore.
Equity
capital stood at Rs 27.28 crore as of 31 March 2022 to Rs 27.28 crore as of 31
March 2021. Per share face Value
remained same at Rs 2.00.
Promoters’
stake was 45.72% as of 31 March 2022 ,compared to 45.69% as of 31 March 2021
.
Cash flow from
operating activities decreased to Rs 823.84 crore for year ended March 2022
from Rs 1,001.90 crore for year ended March 2021. Cash flow used in acquiring fixed assets
during the year ended March 2022 stood at Rs 186.81 crore, compared to Rs
214.99 crore during the year ended March 2021.
The scrip is
currently trading at Rs 1951
Deepak Nitrite : Consolidated
Results
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Particulars
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2206
(03)
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2106
(03)
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Var.(%)
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2203
(12)
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2103
(12)
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Var.(%)
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Net
Sales
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2,057.99
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1526.22
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35
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6,802.19
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4,359.75
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56
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OPM
(%)
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17.3
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29.6
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23.6
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28.6
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OP
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355.98
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451.50
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-21
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1,603.58
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1,247.03
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29
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Other
Inc.
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9.61
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8.25
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16
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42.61
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21.52
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98
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PBIDT
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365.59
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459.75
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-20
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1,646.19
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1,268.55
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30
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Interest
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8.59
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10.94
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-21
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34.04
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74.2
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-54
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PBDT
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357.00
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448.81
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-20
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1,612.15
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1,194.35
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35
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Depreciation
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41.88
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43.56
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-4
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177.7
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152.63
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16
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PBT
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315.12
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405.25
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-22
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1,434.45
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1,041.72
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38
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EO
Income
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0
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0
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0
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0
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PBT
after EO
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315.12
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405.25
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-22
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1,434.45
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1,041.72
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38
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Taxation
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80.5
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102.62
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-22
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367.81
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265.91
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38
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PAT
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234.62
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302.63
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-22
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1,066.64
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775.81
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37
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EPS
(Rs)*
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#
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#
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78.2
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56.9
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Notes
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*
EPS is on current equity of Rs 27.28 crore, Face value of Rs 2, Excluding
extraordinary items.
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#
EPS is not annualised
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bps
: Basis points
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EO
: Extraordinary items
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Figures
in Rs crore
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Source:
Capitaline Corporate Database
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Deepak Nitrite : Consolidated
Segment Results
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%
of (Total)
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2206
(03)
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2106
(03)
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Var.(%)
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%
of (Total)
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2203
(12)
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Sales
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Advanced
Intermediates
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35
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729.98
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527.25
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38
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37
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2,511.05
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Phenolics
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65
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1334.93
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999.08
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34
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63
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4303.42
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Total
Reported Sales
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100
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2,064.91
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1,526.33
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35
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100
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6,814.47
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Less:
Inter segment revenues
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6.92
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0.11
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999
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12.28
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Net
Sales
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2,057.99
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1,526.22
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35
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6,802.19
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PBIT
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Advanced
Intermediates
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41
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132.7
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127.54
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4
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41
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595.73
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Phenolics
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59
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187.74
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287.26
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-35
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59
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867.11
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Total
PBIT
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100
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320.44
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414.8
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-23
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100
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1,462.84
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Less
: Interest
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8.59
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10.94
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-21
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34.05
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Add:
Other un-allcoable
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3.27
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1.39
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135
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5.66
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PBT
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315.12
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405.25
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-22
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1,434.45
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