Castrol India delivers strong Q4 results

Net up 5% at Rs.132 crores

Q4 Oct - Dec 2014
Q3 Oct - Dec 2013
Q4 % Inc/ (Dec)
Full Year Jan - Dec 2014
Full Year Jan - Dec 2013
Full Year % Inc/ (Dec)
Net Sales / Income from Operations
Q4 Oct - Dec 2014
855.9 
Q3 Oct - Dec 2013
806.3
Q4 % Inc/ (Dec)
6.2
Full Year Jan - Dec 2014
3,380.8 
Full Year Jan - Dec 2013
3166.1
Full Year % Inc/ (Dec)
6.8 
Profit Before Tax
Q4 Oct - Dec 2014
206.3
Q3 Oct - Dec 2013
190.3
Q4 % Inc/ (Dec)
8.4
Full Year Jan - Dec 2014
726.3 
Full Year Jan - Dec 2013
761.8
Full Year % Inc/ (Dec)
(4.7)
Profit After Tax
Q4 Oct - Dec 2014
132.0 
Q3 Oct - Dec 2013
126.2
Q4 % Inc/ (Dec)
4.6
Full Year Jan - Dec 2014
474.5 
Full Year Jan - Dec 2013
508.6
Full Year % Inc/ (Dec)
(6.7)
Castrol India Limited today announced its results for the fourth quarter / full year 2014. The company delivered a strong performance during the quarter October – December 2014, continuing to build on operational momentum in a challenging macro-economic environment. Profit from operations during the quarter under review was up sharply at 20%, driven by a 1% increase in volume and a higher Unit Gross Margin. Other Income was sharply lower on account of lower interest post the capital reduction and some one-offs. As a result, Profit after Tax was up by 5% at Rs.132 crores during the quarter under review.
  
For the Full Year 2014, Profit from Operations was higher at Rs.680.6 crores, up 4% over the previous year, despite a sharp increase in Cost of Goods and a challenging environment. Profit after Tax for Full Year 2014 was lower at Rs.474.5 crores compared to Rs.508.6 crores in previous year, largely due to significant lower Other Income, one offs and exceptional items.

The Board of Directors of the company, have at their meeting held on 25 February 2015, recommended subject to the approval of the shareholders of the company, a Final Dividend of Rs.4.00 per share for the year ended 31 December 2014 (2013: Final Dividend Rs.3.50 per share).  In addition, an Interim Dividend of Rs.3.50 per share (2013: Interim Dividend Rs.3.50 per share) was paid on 21 August 2014, both dividends aggregating to Rs.7.50 per share (2013:Rs.7.00 per share). The final dividend would be paid to those shareholders whose names appear in the Register of Members at the close of business hours on 7 May 2015 and would be payable on 4 June 2015. The increase in the dividend for the year reflects the Board’s confidence that the company has built operational momentum in the business and this is likely to continue into 2015. This dividend payable for the year, is in addition to the Rs.5/- per share which was paid back to the shareholders pursuant to the scheme of Capital reduction in March 2014.

Commenting on the results, Ravi Kirpalani, Managing Director, Castrol India Limited, said: “This is indeed a strong overall performance and we have made good progress on our strategic agenda including driving safety, employee engagement scores, brand health and market share of key brands in key geographies – all of which showed improved performance over previous year. We continued to deliver innovative, pioneering technology products for our consumers and launched the world’s first carbon neutral range of engine oils in India under the Castrol Professional range.

We also led the industry by driving new category creation in the Commercial Vehicles and Scooter segments, launching two new brands – Castrol CRB Mini-truck (for Medium Light Commercial Vehicles) and Castrol Activ Scooter (for the fast growing Scooter segment).”

Commenting on the Industrial business, Mr Kirpalani said: “Despite significant demand shrinkage in core manufacturing sectors, the company’s Industrial business also showed a very good performance during the year under review with Volumes increasing by 8% over previous year.”

During the year under review, Castrol was valued as the 15th most valuable brand across categories in India in the BrandZ study done by Millward Brown.  The study valued the Castrol brand at $1.3 billion. Castrol was one of the few balanced brands - wherein equity (depth of emotional connect) was at par with financial value (width/ scale built). The company also received several awards, especially for the pioneering work done in the digital / social media space.

Outlook:

Looking ahead, although the sharp drop in crude oil price will translate into lower base oil cost in the short term, there is likely to be continuing volatility in crude prices and currency movement. If the general economic environment improves, we expect demand to start picking up during the second half of the year. In the longer run, we continue to remain optimistic about the Indian lubricant market and our business growth. The company is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.