SRF Limited: Company reports better numbers over preceding June '12 quarter, challenges remain

MUMBAI: Manufacturer of refrigerants, engineering plastics, packaging film and industrial yarns SRF Limited posted a dismal performance against the year ago period for the September quarter, as the company's CER revenues dropped. The numbers appeared better over preceding June '12 quarter, but that was mainly due to forex gains.

SRF reported a net profit after tax of Rs 75 crore during the second quarter of 2012-13 against Rs 22 crore recorded during the quarter ended June 2012. However, it was 30% lower compared to the September '11 quarter. The company's revenues also declined 12% from Rs 914 crore to Rs 804 crore.

The company reported forex gains of Rs 41.5 crore during the quarter against a loss of Rs 20.2 crore in Sept '11 quarter and loss of Rs 45.7 crore in June '12 quarter.

The company's chunk of revenues used to come from selling Certified Emission Receipts (CERs) on its HFC destruction project. European Union decided to stop recognising these credits starting 2013 resulting in a crash in prices.

As a result, SRF's chemical segment faced the biggest stress with revenues falling 38% to Rs 206.3 crore and segmental profits dropping 77% to Rs 42.1 crore. The Packaging Films Businesses recorded a decline of 45% in its operating profit at Rs. 6 crore at revenue of Rs. 164 crore. While the segment revenue for the Technical Textiles Business grew by 4% from Rs. 420 crore to Rs. 435 crore, its operating profit increased by 10% from Rs. 30 crore to 33 crore during the quarter ended September 2012

The company announced an interim dividend of Rs 5 per share, which was lower than Rs 7 per share it announced last year. The total dividend for FY12 worked out to Rs 14 per share.