BWI: Castrol India 2008 Net Up 20 %

Press release from Business Wire India
Source: Castrol
Monday, February 02, 2009 05:44 PM IST (12:14 PM GMT)
Editors: General: Consumer interest, Economy; Business: Automotives, Banking & financial services, Financial Analyst, Stock exchanges; Automotive
Release no: 19119
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Castrol India 2008 Net Up 20 %
Total Dividend at Rs.15/- per Share

Mumbai, Maharashtra, India, Monday, February 02, 2009 -- (Business Wire India) -- Castrol India Limited today declared its audited results for the financial year ended 31st December 2008. The results reflect a strong performance in line with the company's growth agenda.

Financials for the year January - December 2008

-- Net profit for the year increased by 20% to Rs.262 crores against Rs.218 crores in the previous year

-- Gross turnover for the year was Rs.2532 crores; an increase of 14% over previous year

-- Operating margin for the year increased to 18%

-- Earnings per share increased to Rs 21.2 from Rs.17.7 in the previous year

-- Return on Net Worth increased to 58%

The Board of Directors at its Meeting held today, recommended a final dividend of Rs.9/- per share for the year ended 31st Dec 2008 (2007 final dividend: Rs. 9.5 per share) in addition to an interim dividend of Rs 6/- per share (2007 Interim dividend : Rs. 4.5 per share), totaling to Rs.15/- per share for the full year 2008 (versus Rs 14/- per share for 2007).

Commenting on the full year results, Naveen Kshatriya, Managing Director, Castrol India Limited said, "Overall, 2008 was a good year for Castrol India, with a 13% increase in gross profit despite a 20% increase in raw materials costs and marginal volume drop. We managed to offset the sharp increase in cost of goods by pricing actions and mix enrichment. Coupled with effective overheads management, the company delivered a 20% growth in net profit for the year."

This is an extraordinary result given the escalation in raw material prices during the year and the economic meltdown in the second half. The company delivered a record first half performance driven by profitable volume growth and margin expansion despite shortage and high cost raw material environment. In spite of continued improvement till Quarter 3, the overall second half performance was impacted due to the very challenging fourth quarter. This may be attributed to sudden deterioration of external economic environment and high raw material prices, abetted by sharp depreciation of the Indian rupee. The fourth quarter was further affected by visible slowdown in demand, driven largely by tough economic conditions and credit crunch. Furthermore, sharp decline in crude and commodity prices and fall in industrial production led to huge uncertainties in market sentiment. Thus, in addition to real consumption drop, this uncertainty triggered trade destocking. All of this resulted in significant market volume contraction in fourth quarter which impacted our company's volumes and overall gross profit as well. We rapidly responded with accelerated cost containment programs which continue."

Outlook

With the current global economic environment, market demand is expected to remain sluggish during the first half of 2009. This is expected to negatively impact our volumes in the short term. However, a good agriculture season and the benefit of raw material cost reduction will help grow gross margins.

In 2009 we expect to continue our value growth journey with continued focus on customer value, product upgradation and superior service to manage the external challenges. This year, we also complete 100 years of the Castrol brand in India and we will unveil powerful consumer and customer offers to mark this occasion.

We continue to focus on our strategy of performing in all conditions and delivering a sustainable performance.

For CASTROL INDIA LIMITED

Naveen Kshatriya
Managing Director

To view the press release along with the tables and the Financial Results, click the links below:

Press Release

Financial Results
For picture(s)/data to illustrate this release click below:

http://www.BusinessWireIndia.com/attachments/Press_Release_Q4.doc
Press_Release_Q4.doc
http://www.BusinessWireIndia.com/attachments/Financial_Results(6).xls
Financial_Results(6).xls


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KEYWORDS
CONSUMER, ECONOMY, AUTOMOTIVE, BANKING, Financial Analyst, STOCK EXCHANGES, AUTOMOTIVE, 500870.BO

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