Press releases

Tata Chemicals Q3 FY09 Revenues up by 106 per cent at Rs3495 crore

• Profit before exceptional items and taxes up by 22 per cent at Rs203 crore
• Profit from operations up by 52 per cent at Rs301 crore
• Business Highlights
• Babrala debottlenecking programme completed
• Fertiliser bonds worth Rs. 735 crore received in FY09
• GCIP margins continue to be strong; EBITDA/ Sales: 34 per cent for the quarter
• Soda ash business experiences moderate price and volume contraction
• Tata Salt maintains No. 1 position. Tata Chemicals' total market share : 58 per cent
• Newly launched Tata Salt Lite receives encouraging feedback
• 30 kl/day Ethanol plant ready to be commissioned
• Strong balance sheet, steady cash flows support business despite economic slowdown

9MFY09 Financial Highlights

• Revenues at Rs10,335 crore up 128 per cent YOY
• Profit from operations increases 127 per cent to Rs1,427 crore
• Profit before exceptional items and tax at Rs1,191 crore, up 98 per centr
• Profit after Tax (after Minority Interest): Rs476 crore
• Diluted EPS (for the period): Rs20.09

Q3FY09 Financial Highlights

• Revenues at Rs3,495 crore up 106 per cent
• Profit from operations increases to Rs301 crore up 52 per cent
• Profit before exceptional items and tax at Rs203 crore, up 22 per cent

Tata Chemicals Limited, a leading manufacturer of chemicals, fertilisers and food additives today announced it's consolidated & standalone financial results for the quarter ended December 31, 2008. The Company is the second largest manufacturer of soda ash and the third largest producer of sodium bicarbonate in the world, apart from being the leader in the Indian market. Tata Chemicals also enjoys leadership in the Indian edible salt market and is the most efficient manufacturer of urea fertiliser in the country.

Commenting on the Company's performance for Q3 and 9M FY 2009, Mr. R Mukundan said:

"Despite the continuing challenges faced by the macro environment, Tata Chemicals is well positioned to continue to grow and create value.

Our fertiliser business provides a strong platform of stable demand and steady inflows. We have successfully completed the debottlenecking of our Babrala facility and will begin despatching material from this month onwards. During the year we have seen extreme volatility in our phosphatics business. We however expect the situation to stabilise by the first quarter of the next fiscal. Food additives is another stable business and our Tata Salt brand continues to enjoy high brand equity and premium position. Soda ash prices, volumes offtake and prices have been impacted but still to a lesser degree than most other commodities. There are also markets like Latin America where we are still seeing healthy offtake.

Our balance sheet position is strong and capable of supporting our business plans. In line with the macro-environment, we have moderated our aggressive investments in growth but continue to explore opportunities where we can leverage our scale and competitive strengths."

Note:
Consolidated financials indicated in this communication are reviewed and primarily include those of Tata Chemicals standalone entity, the Brunner Mond Group acquired in December 2005, the one third stake acquisition in Indo Maroc Phosphore S.A. (IMACID) and the acquisition of General Chemicals and Industrial Products acquired in March 2008.

YEAR – ON – YEAR CONSOLIDATED PERFORMANCE COMPARISION

• 9M FY2009 (April – December 2008) v/s 9M FY2008 (April – December 2007)
• Net income from operations (net of excise) at Rs10,335 crore compared to Rs4,541 crore in 9M FY 2008, an increase of 128 per cent
• Profit from operations at Rs 1,427 crore higher by 127 per cent compared with Rs629 crore in corresponding period last year
• Profit before exceptional items and tax up by 98 per cent at Rs 1,191 crore; as against Rs601 crore last year
• Profit after Tax (PAT) (after Minority Interest)at Rs 476 crore compared with Rs437 crore in 9M FY 2008, up 9 per cent
• Basic EPS (not annualised): Rs20.27
• Diluted EPS (not annualised): Rs20.09

Balance sheet perspective
Total cash on the balance sheet as on December 31, 2008 amounted to Rs1,199 crore (inclusive of value of fertiliser bonds as on December 31, 2008). Operating cashflows have been and are expected to continue to be healthy lending strength to Tata Chemicals' balance sheet and enabling it to support the Company's objective of strengthening its competitive position through a mix of and organic and viable inorganic initiatives as well as efficiency enhancement.

The Company's consolidated net debt as on December 31, 2008 stood at 4,639 crore. This comprises borrowings of USD 475 million taken on the Tata Chemicals balance sheet and a loan of USD 300 million taken on the GCIP balance sheet, both of which have been taken at extremely fine rates. Payment towards the former will commence in 2012 while towards the latter will begin in February 2009.

Net Debt to Equity as on December 31, 2008 stood at 1:1

SEGMENTAL PERFORMANCE
A. CHEMICALS
Domestic sales amounted to Rs 540 crore for the quarter ended December 31, 2008; PBIT margins for the chemicals business stood at 18 per cent for the quarter.

Soda ash

• Performance perspective
• Tata Chemicals maintained its leadership position in the domestic soda ash market and domestic chemicals results are stable
• Sales volumes (including exports) for soda ash at Mithapur for the quarter ended 31 December 2008 stood at 170,000 tonnes.

Industry perspective and outlook

• In line with the performance of other commodities, soda ash prices and volume offtake declined during the quarter especially in the African & Asian markets
• Towards the end of the quarter some shrinkage in volumes has also been witnessed in the US export markets & in Western Europe
• In India prices have been reduced by - 6 per cent during the quarter. Margin impact from these developments is however softened due to the commendable decline seen in prices of key inputs like coal and coke

Consumer Products

• Tata Chemicals' market leadership in the domestic edible salt market broke its own record again and reached an all time high of 58 per cent in the national branded segment
• Tata Salt's continues at number one position with market share of about 44 per cent
• I-shakti continues as the third largest salt brand in India in its first year. Its national branded market share is 14 per cent
• Recently launched Tata Salt Lite continues to receive an encouraging response

B. CROP NUTRITION BUSINESS (formerly Fertilisers Business)

• Domestic sales for Q3FY09 from the crop nutrition business were Rs2,062 crore
• PBIT margins stood at 4 per cent
• The Babrala plant has been fully debottlenecked and now is producing 3,500 tpd levels.
• The facility was shut for a period of around 40 days to ensure stability of operations
• A steeper decline in DAP prices as compared to those of phosphoric acid impacted performance of the phosphatic fertiliser business

C. FOREIGN SUBSIDIARIES AND JOINT VENTURES OVERVIEW
BMGL

• Despite increased inflow from China, reduced input & energy costs are helping combat hostile market dynamics
• The European operations are stable despite a slowdown in the region

GCIP

• GCIP produced 1.76 million tonnes of soda ash in 9MFY09. Sales for the period amounted to 1.77 million tonnes
• EBITDA margins 34 per cent for the quarter and 31 per cent for the 9 months under review
• Despite American demand continuing to decline, contracts have been entered into at higher prices than the previous year

IMACID

• Continuing unavailability and higher prices of rock phosphate impacted operations at IMACID

D. NEW BUSINESSES

• Fresh Produce
• Operations have commenced in Ludhiana
• The business is focussed on improving margins through volume and product mix enhancements

Bio-fuels

• 30 KL/day Ethanol plant ready to be commissioned
• The construction of a biodiesel pilot plant of capacity 5 KL/day is being planned
• Trial cultivations of Jatropha continue in various states