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Rain Industries Limited (Formerly Rain Commodities Limited) - - PowerPoint PPT Presentation
Rain Industries Limited (Formerly Rain Commodities Limited) - - PowerPoint PPT Presentation
Rain Industries Limited (Formerly Rain Commodities Limited) Corporate Presentation May 2015 Forward Looking Statement Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be
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SLIDE 3
Rain Group – Business Verticals and Geographical Presence
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Rain Group
Chemical Products Cement Products Carbon Products
Rain Group – Business Verticals
- Manufacturing and sale of Calcined
Petroleum Coke (“CPC”), Coal Tar Pitch (“CTP”) , Naphthalene, Co-generation
- f energy and trading of GPC.
- Seven CPC Plants with an aggregate capacity of
2.1 million Tons in India and US.
- Five Waste-heat Recovery Power Plants
- f an aggregate capacity of 125 MW in
India and US
- Additional CTP Plant of 0.3
Million Tons in Russia is expected to commence
- perations during Q4
- f 2015.
- Manufacturing and Sale of Cement.
- Two integrated Cement plants , one each in
Andhra Pradesh & Telangana along with a Packing Plant in Karnataka.
- Annual capacity of 3.50 Million Tons.
- Activities in the states of Andhra Pradesh, Karnataka,
Maharashtra, Orissa, Tamil Nadu and Telangana.
- Distillation and sale of primary
coal tar distillates into chemical products such as:
- Resins and Modifiers
- Aromatic Chemicals
- Super-plasticizers
- Other Chemicals
- Markets Cement under the brand “Priya Cement”
- Activities across the World with
Four operating facilities in Europe and North America.
Growth opportunities exist in all three business verticals
- Four CTP Plants with an aggregate capacity of
1.0 million Tons in Europe and North America.
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1998 2005 2007 2008 2015 & 2016
Completed Brownfield Cement expansion of 1.5 Million Tons RCL doubles CPC capacity in India to become fifth largest Calciner globally
- Merger of RCL with Rain
Commodities Ltd.
- Acquisition of CII
(the 2nd largest Calciner at that point of time) at an EV
- f US$ 619 million
Rain Calcining Ltd. (RCL) begins operations in Visakhapatnam, India with a capacity of 0.3 Million Tons Greenfield Coal Tar Distillation facility with a capacity of 0.3 Million Tons, through Russian JV. Set-up of 22 MW Solar Power Plant in Dharmavaram, Anantapur District, Andhra Pradesh Set-up 7 MW Waste-heat Recovery Power Plant at Cement Plant in Kurnool, Andhra Pradesh
Rain Group is growing continuously in its core business, through capacity expansions, acquisitions and successfully integrating the same with its existing business
Setting up of Group’s fifth Waste-heat recovery facility in United States
2012 2013
Acquisition of RUETGERS (Second largest Coal Tar Distiller in the World) at an EV of € 702 million
2014
Completed Brownfield expansion
- f Phthalic Anhydride (“PA”)
Project in Belgium
Rain Group – Key Milestones
SLIDE 6
6 North America
- 7 Carbon Facilities
(Including 3 River Terminals and 4 Waste-heat recovery facilities)
- 1 Chemical Facility
Europe
- 3 Carbon Facilities
- 4th Carbon Facility in Russia
is under construction
- 3 Chemical Facilities
Africa
- 1 Carbon Facility in
Egypt Asia
- 1 Carbon Facility (including 1
Waste-heat recovery facility) in India
- 2 Cement Facilities in Andhra
Pradesh (and one packing facility in Karnataka)
With best-in-class Facilities across Four Continents, Rain Group supplies to customers across the World
Diversified Geographical Profile
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Industry Updates
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Overview of Calcined Petroleum Coke (“CPC”) Industry
Green Petroleum Coke - A by-product
Calcined Petroleum Coke Captured through calcining process
Overview World CPC Demand by End-use
CY 2014
CPC is produced from GPC, a by-product of crude oil refining Calciners compete on the basis of product quality and reliability, apart from the price Availability of Anode-grade GPC has been declining as oil refiners process heavier, more sour crude oils Additional worldwide CPC capacity effectively constrained by availability
- f suitable GPC (Anode Grade GPC)
Industry participants working to develop CPC from lower quality GPC sources Every Ton of Aluminum requires ~ 0.4 Tons of CPC
Oil Refining Industry GPC production related to refining of sweet crude Reliable off-take is critical Coke Calciners
Critical in the value chain of Green Coke Regional competition given high transportation costs High barriers to entry due to limited availability
- f GPC and scale of economies
Aluminum Industry CPC <10% of Production Cost
Not economically viable substitute for CPC in Aluminum production process Reliable and continuous supply of CPC with consistent high quality is crucial Complementary to CTP in anode production
Aluminium 77% TiO2 4% Other 19%
Rain has Seven CPC Plants in US and India with aggregate capacity of 2.1 MTA and supplies to customers around the world, except Australia and China.
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9 Critical in the value chain of coal tar Regional competition given logistical limitations/high transportation costs High barriers to entry due to scale economies, asset intensity and know-how requirements
Overview of Coal Tar Pitch (“CTP”) Industry
Steel Industry Coal Tar Distillers Aluminum Industry Pitch ~48% Aromatic Oils ~40% Naphthalene Oil ~12% Pitch <5% of Production Cost
Coke production related to steel industry’s production volumes Reliable off-take is critical No economically viable substitute for pitch in Aluminum production process Reliable and continuous supply of pitch with consistent high quality is crucial Complementary to CPC in anode production
Coal Tar - A by-product
Overview
CTP is produced from coal tar, a by-product of metallurgical coke ovens in the steel industry The need for CTP determines the rates of operation for coal tar distillation Distillers position their facilities in close proximity to tar suppliers due to specialized transportation requirements to move coal tar and costs associated therewith CTP is the essential binder used primarily to make carbon anodes for the aluminum industry and carbon electrodes for the electric arc furnaces of the steel industry, in addition to other lower volume applications Every Ton of Aluminum requires ~ 0.1 ton of CTP Aluminum Anode 79% Electrodes 12% Other end users 9%
World CTP Demand by End-use
CY 2014
Rain has Three Plants in Belgium, Canada and Germany with aggregate capacity of 1.0 MTA and Fourth Plant of 0.3 MTA under construction in Russia and supplies to customers around the world, except Australia and China.
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Overview of Chemical Products of Rain Group
Key Raw Materials Naphthalene oil Carboindene C9 feedstock Carbolic oil Anthracene oil Crude benzene/benzene Products Superplasticizer chemicals Resins Modifiers (DIPN) Phenol Specialty products Crude benzene/benzene Key Applications Key End Markets Chemicals Admixture and construction Adhesives/coatings Rubber Paper Chemicals Automotive/tyres Wire varnish Carbon chemicals Crude aromatics Plants Candiac (CAN) Duisburg (GER) Uithoorn (NL) Castrop-Rauxel (GER) Duisburg (GER)
Chemicals
Superplasticizer Resins & Modifiers Aromatic Chemicals Chemical Trading
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2011 2012 2013 2014 2015F 2016F 2017F 2018F
45.7 48.0 50.6 54.1 57.6 60.7 63.1 65.5
CPC Outlook - % of Reserve Calcining Capacity Coal Tar Pitch Outlook
(Mt in millions)
Global Aluminum production is expected to grow at a CAGR of 5% driving incremental demand for both CPC and CTP
5.9% 6.8% 4.6% 3.0% 3.2% 2.5% 3.1%
- 2.6%
- 1.8%
- 3.8%
- 5.2%
- 5.0%
- 5.7%
- 5.1%
- 8.00%
- 6.00%
- 4.00%
- 2.00%
0.00% 2.00% 4.00% 6.00% 8.00% 2011 2012 2013F 2014F 2015F 2016F 2017F Rated Effective
Tight Market
2011 2012 2013F 2014F 2015F 2016F 2017F
5.3 5.5 5.8 6.2 6.7 7.0 7.5 5.2 5.4 5.8 6.2 6.7 7.0 7.5 Production Demand
Global Aluminum Consumption
(Mt in millions)
2011 2012 2013 2014 2015F 2016F 2017F 2018F
45.0 47.3 50.3 54.1 57.3 60.7 63.5 63.2
CAGR: ~4.9%
Global Aluminum Production
(Mt in millions)
CAGR: ~4.7%
Aluminum Industry Outlook
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Aluminum Industry Outlook (Contd.)
Aluminum Price Forecast - (US$ per MT) Total metal stocks and days of inventory
11,694 12,773 13,109 13,128 13,450 13,464 13,092 12,327 11,608 95 99 95 89 86 81 75 68 62 40 50 60 70 80 90 100 110 6,000 8,000 10,000 12,000 14,000 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2,419 2,049 1,887 1,892 1,938 2,045 2,195 2,288 2,343 1,500 1,700 1,900 2,100 2,300 2,500 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 5 10 15 20 25 100 200 300 400 500 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E Rotterdam duty paid premium ($/t) Japan cif 3m premium ($/t) US Midwest premium (¢/lb)
Regional premiums - (US$ per MT) & (¢/LB) World Excl. China market balance - (‘000 MTs)
- 138
- 637
- 658
- 447
- 797
- 1014
- 819
- 1200
- 1000
- 800
- 600
- 400
- 200
2013 2014 2015E 2016E 2017E 2018E 2019E
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100 200 300 400 500 600 700 800 900 1,000 1,100 1,200
- Av. benzene (spot price)
- Av. benzene (spot price) 2009 - today
300 400 500 600 700 800 900 1,000 1,100 1,200
- Av. (spot price) orthoxylene
- Av. (spot price) orthoxylene 2009- today
100 200 300 400 500 600 700 800
- Av. Fuel oil 1%
Average EUR Fuel oil 1%
Benzene Orthoxylene Fuel Oil
Market - Key Quotations
Source: Platts
Commodity prices declined sharply during Dec.’14 Quarter and started recovering in March’15 Quarter
Naphthalene
150 250 350 450 550 650 750 850
- Av. monthly naphta (spot price)
- Av. monthly naptha (spot price) (2007 - today)
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14 20.00 30.00 40.00 50.00 60.00 70.00
Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15
US$ to RUB
1.00 1.10 1.20 1.30 1.40
Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15
EURO to US$
Foreign Exchange Movements
Latest (Q115 Closing) 1.079 Lowest (Mar 16,2015) 1.053 Highest (Mar 13, 2014) 1.393 December 2012 – March 2015 US$/EUR Movement With series of positive developments in the United States, Dollar appreciated against Euro. Strong appreciation of USD against Euro in Q12015 strengthened competitiveness. Latest (Q115 Closing) 62.59 Lowest (Feb 4,2013) 52.97 Highest (Aug 28, 2013) 68.36 December 2012 – March 2015 INR/US$ Movement December 2012 – March 2015 RUB/US$ Movement Latest (Q115 Closing) 57.81 Lowest (Jan 14,2013) 29.37 Highest (Feb 2, 2015) 70.04
48 53 58 63 68
Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15
US$ to INR
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Rain Group – Financial Snapshot
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Coal Tar Distillation Plant in Russia:
- New Coal Tar Distillation Plant with a capacity of 300,000 TPA is being developed in Cherepovets, Russia via Joint Venture with OAO Severstal,
- Russia. Plant is expected to be operational during Fourth quarter of CY 2015.
- Long-term viability of the Russian Plant was not impacted due to devaluation of the Russian Ruble, as majority of the production from the
Russian Plant will be sold in prices denominated either in US Dollars or in Euros. WHR Co-generation Power Plant:
- The Company is proposing to set-up a 7 MW Waste-heat Recovery Co-Generation Power Plant in its Kurnool Cement Plant with an estimated
total capital outlay of INR 700 million.
- WHR Power Plant is expected to be operational in first-half of CY 2016 and would result in lower energy cost leading to improved operating
margins in Cement Business. Solar Power Plant in Anantapur District of Andhra Pradesh:
- The Company executed Power Purchase Agreement with Southern Power Distribution Company of Andhra Pradesh (“APSPDCL”) for 22 MW
Solar Power Plant in the Anantapur District of Andhra Pradesh.
- Although the Company owns free-hold land required for a Solar Power Plant in Tadipatri Village in Anantapur District, APSPDCL allocated
Sub-station for evacuation of Power in Dharmavaram Village of Anantapur District. Accordingly, the Company is in the process of acquiring land to set-up the Solar Power Plant. The total capital outlay for the Solar Power Project is estimated to be INR 1,400 million.
- Solar Power Plant is expected to be operational in Second-half of CY 2015 and once operational, Solar Power Plant would generate Operating
Profit of about INR 200 million per annum.
Corporate Highlights – Expansion Projects
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Consolidated Financial Performance
PAT
(INR Millions)
Earnings Per Share
(INR)
25,289 25,899 30,843 117,336 Q1 15 Q4 14 Q1 14 CY 14 3,135 1,577 3,235 12,220 Q1 15 Q4 14 Q1 14 CY 14 843 (321) 501 2,561 Q1 15 Q4 14 Q1 14 CY 14 12% 6% 10% 10% Q1 15 Q4 14 Q1 14 CY 14
Revenue
(INR Millions)
Adjusted EBITDA
(INR Millions)
Adjusted PAT
(INR Millions)
Adjusted EBITDA Margin
(%)
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Business Concentration – Q1-2015
Carbon 70% Chemical 20% Cement 10%
Revenue Breakdown
Carbon 73% Chemical 15% Cement 12%
EBITDA Breakdown
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19 0.44 0.41 0.40 0.42 0.41 0.44 0.39 0.38 0.37 0.26 0.28 0.25 0.24 0.25 0.29 0.28 0.25 0.26 0.09 0.13 0.07 0.13 0.21 0.06 0.14 0.18 0.21
- 0.10
0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15
Sales Volume in Million Tons CPC CTP & Others GPC - Trading
Carbon Products – Sales Volumes
SLIDE 20
20 8,841 8,493 9,090 9,152 8,803 9,215 8,047 7,253 7,724 10,196 11,411 11,391 10,575 11,322 12,371 11,864 9,435 8,630 767 1,038 722 1,031 2,257 625 1,165 1,615 1,314 15% 16% 14% 13% 12% 13% 14% 8% 13% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%
- 2,000
4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15
Margin in % Revenue INR in Million
CPC Others GPC EBITDA Margin
Notes: 1) CPC revenues include revenues from Waste-heat Recovery Energy revenues 2) Revenues from Other Carbon Products include CTP and other derivatives of Coal Tar Distillation 3) GPC revenues are revenues from Pet Coke Trading
Carbon Products – Revenues & EBITDA Margins
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21 5,336 5,872 6,656 6,071 6,539 6,504 6,290 5,296 4,999 7% 11% 11% 12% 10% 13% 7%
- 2%
9%
- 5%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
- 1,000
2,000 3,000 4,000 5,000 6,000 7,000 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15
EBITA Margin Revenue INR in Millions
Revenue EBITDA Margin %
Chemicals – Revenue & EBITDA Margins
Due to fall in commodity prices, performance is impacted during Q4 of CY14. Performance would improve during CY15, with stabilization of prices, coupled with the benefit of expansion projects
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22 2,260 2,252 1,901 1,983 1,922 2,183 2,330 2,300 2,623 195 334 210 381
- 142
34 402 562 721
- 800
- 700
- 600
- 500
- 400
- 300
- 200
- 100
- 100
200 300 400 500 600 700 800
- 500
1,000 1,500 2,000 2,500 3,000 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15
EBITA Margin INR Per MT Revenue INR in Millions
Revenue EBITDA Per Ton
Cement – Revenue & EBITDA Margins
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Consolidated Financial Leverage
8,398 12,104 13,933 21,209 25,517 32,233 29,458 26,627
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Mar 15
4.21 X 2.23 X 1.98 X 1.35 X 0.88 X 2.31 X 2.29 X 2.47 X
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Mar 15
35,333 26,964 27,543 28,574 22,611 74,459 67,535 65,800 729 578 615 536 413 1,203 1,066 1,051
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Mar 15
7.87% 6.40% 6.17% 6.25% 5.78% 7.48% 7.42% 7.46%
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Mar 15
Net Debt in INR and US$ Pre-tax Cost of Debt Net Debt to Equity
INR Millions INR Millions US$ Millions
Equity
Fall in Equity is due to fall in Euro – INR Exchange rate resulting in lower FCTR
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Term Debt Profile
As at March 31, 2015 (US$ Millions) Amount Type of interest Rate Remarks
Senior Secured Notes 1,007 Fixed rate 8.21% Bullet repayment in 2018 and 2021. External Commercial Borrowings 41 Floating rate 4.00% Quarterly installments up to 2016 Senior Bank Debt 30 Floating rate 5.23% Annual installments up to 2018 Loan from JV partners 8 Fixed rate 8.50% Bullet repayment in 2018 Other Debt 13 Fixed rate 4.55% Including US$ 15.5 Millions of Finance Leases Sales Tax Deferment (INR denominated) 13 Interest Free
- Repayable over a period of 15
years beginning from 2012. Gross Term Debt 1,112 7.84% Add: Working Capital Debt 74 1.36% Total Debt 1,186 7.44% Less: Cash and Equivalents 135
Net Debt 1,051
US$ Millions Debt as at March 31, 2015 1,112 Scheduled Repayments CY 2015 16 CY 2016 29 CY 2017 35 CY 2018 392 Later Years 640
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Issue Date Interest Issue Amount (in Millions) Out-standing As on Mar 15 (US$ in Millions) Scheduled For Repayment Redemption Option On or After / (Redemption Premium Payable) Dec 2010 8.00% US$ 400 380 Dec 2018 December 1, 2014 [4% *] Dec 2012 8.25% US$ 400 400 Jan 2021 January 15, 2016 (~ 6% #] Dec 2012 8.50% Euro 210 227 & Jan 2021 January 15, 2016 (~ 6% #] Total 1,007
* Redemption premium would decline to 2% / 1% after December 1, 2015 / 2016. # Redemption premium would decline to ~ 4% / ~ 2% / ~ 1% after January 15, 2017 / 2018 / 2019 & Applying Euro – USD Exchange Rate of 1.08 as on March 31, 2015.
- Bonds of US$ 400 million were issued in December 2010 to repay 11.125% Bonds and Other bank loans, earlier borrowed
for acquisition of CII Carbon LLC during July 2007 and to invest in RCC’s Fourth Waste-heat Recovery Power Plant.
- Bonds of US$ 400 million and € 210 million were issued in December 2012 to primarily finance the acquisition of Rütgers.
- These Bonds are similar to “Non Convertible Debentures”:
- With no periodical repayments and 100% of Principle payable as Bullet-repayment.
- No recurring financial covenants to be complied, except certain restrictions on investments, payment of dividends and
incurring of additional borrowings, etc.
- Payment of interest at a fixed coupon payable Bi-annually.
Senior Secured Notes / Bonds
(Issued by Rain CII Carbon LLC, US )
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The Company is well trimmed for growth
One of the leading Producer of Carbon and Chemical products Long Term Relationship with high quality Suppliers and Customers Continuous R&D for product improvements Diversified Product Portfolio Experienced and Proven Management Team Positioned to benefit from long-term demand growth
- f the Aluminium industry
Eco-friendly Energy Generation through Waste Heat Recovery
Key Strengths
Global Market Presence with World-class Asset Base
Rain Group
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Key Areas of Focus
Successful implementation of these initiatives would substantially enhance Shareholder Value
De-leveraging Balance Sheet Refinancing high-cost debt with low-cost debt Improving operational efficiency Timely Completion of Expansion Projects Expanding R&D initiatives to create more environment friendly Carbon
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Annexures
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Promoters 40.9% Domestic Institutions 17.2% Foreign Institutions 15.7% Public 26.2%
Mar 31, 2015
Promoters 40.9% Domestic Institutions 16.6% Foreign Institutions 15.7% Public 26.8%
Dec 31, 2014
RIL Share Holding Pattern
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30 4,038 4,438 2,407 6,641 4,577 3,855 885 482 760 726 336 179 320 296 303 302 379 440 430 343 336
- 200
400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
- 1,000
2,000 3,000 4,000 5,000 6,000 7,000 8,000 2008 Payout Ratio 11.9% 2009 Payout Ratio 6.8% 2010 Payout Ratio 15.7% 2011 Payout Ratio 11.4% 2012 Payout Ratio 15.9% 2013 Payout Ratio 8.9% 2014 Payout Ratio 37.4%
Reported PAT Buy Back Dividend
Cumulative Number of Shares Bought Back: 23.83 Millions (of INR 2 each) Cumulative Amount Spent for Buy-Back: INR 795 Million
INR Millions
Note: Although the Company obtained shareholders approval through postal ballet for buy-back program of INR 515 Millions during CY 2009; the Company could not pursue the buy-back program due to positive movement in the share price.
Pay-out Ratio
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Consolidated Key Performance Indicators
(1)Revenue from operations includes other operating income (2)Operating Profit is Profit before Other Income, Exchange Loss, Depreciation, impairment loss, Interest, Taxation and exceptional items (3) Summary of adjustments to Reported PAT to derive Adjusted PAT:
- Profit After Tax for CY 2014 is adjusted for incremental pension liability from actuarial losses of Rs. 1,820 Million, Inventory write down due to fall in oil
prices of Rs. 237 Million, Russian ruble currency devaluation impact Rs. 338 Million, Impairment loss of Rs. 95 Million, net tax impact on all these items
- f Rs. 814 Million.
- Profit After Tax for CY 2013 is adjusted for insurance claim proceeds of Rs. 375 Million, costs incurred for acquisition of RUETGRES of Rs. 142 Million,
Moundsville Impairment loss of Rs. 1,304 Million, net tax impact on all these items of Rs. 404 Million.
- Profit After Tax for CY 2012 is adjusted for one time expenditure of Rs. 1,789 Million (net of tax Rs. 1,219 Million) incurred in-connection with the
acquisition of Rütgers.
- Profit After Tax for CY 2010 is adjusted for net exceptional expenditure of Rs. 1,249 Million (net of tax Rs. 898 Million).
Q1 2015 CY 2014 CY 2013 CY 2012 CY 2011 CY 2010 Revenue from operations (1) 25,390 119,370 117,443 53,615 56,395 37,857 Operating Profit (2) 3,135 12,220 14,978 11,090 13,873 7,559 Reported PAT 843 885 3,845 4,577 6,641 2,407 Adjusted PAT (3) 843 2,561 4,512 5,796 6,641 3,305 INR Millions
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- What is the Impact of falling Crude Oil / Commodity prices on the businesses carried-out by Rain?
- Prices of CPC and GPC are not indexed to Crude Oil or other Commodity prices and they are influenced by their own
supply-demand dynamics. Although, prices of both GPC and CPC fluctuate widely, the spread between prices of GPC and CPC move in a narrow-range.
- Prices of certain Carbon products and Chemical Products manufactured by the Company are indexed to Crude Oil or
- ther Commodity prices. As both Raw-materials and Finished Products in Coal Tar Distillation are indexed to Crude Oil
- r Other Commodity prices with a lag of few months, there is no impact of falling Crude Oil or other Commodity prices
- n the business of Coal Tar Distillation in the medium term. The Company has some exposure to the BTX and Ortho-
xylene pricing.
- What is the Impact of falling Aluminium prices on the businesses carried-out by Rain?
- Prices of CPC and CTP are not indexed to Aluminium prices and they are influenced by their own supply-demand
dynamics.
- As CPC and CTP are critical consumables used in manufacturing of Aluminium metal, their demand is directly
proportionate to production of Aluminium metal and not linked to Aluminium prices.
- What is the Impact of weakening Russian Ruble on the viability of Russian Tar Distillation Plant?
- The weakening Russian Ruble will not impact the viability of Russian Expansion, as the finished product from Russian
Plant will be sold either in Russia (as an import-substitute) or exported from Russia. With conversion costs being incurred in Russian Ruble, the plant will be more competitive in the international market.
Frequently Asked Questions
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- What are the plans for de-leveraging the Company, considering the high-leverage?
- Gross debt of the Company has reduced by US$ 25 million from US$ 1,211 million as on Dec. 31, 2014 to US$ 1,186
million as on Mar. 31, 2015. Net debt during the same period reduced by US$ 15 million. Reduction in gross debt is mainly due to repayments of US$ 11 million in working capital debts and exchange rate reinstatements. The Company continues to focus on reduction of both Gross debt and Net debt.
- Net Debt-to-annualised EBITDA is higher at 5.25 X as on March 31, 2015; the Interest-to-EBITDA for Q1 2015 is better
at 2.2 X, even in weaker business conditions and when one major expansion is under implementation.
- With no major repayments in next three-years; the Company is well positioned to meet all repayment obligations.
- The Company has options to make Bullet Repayments of US$ 380 million and US$ 655 million due in December 2018
and January 2021 respectively, partly through internal accruals and partly from fresh borrowings.
- What is the Impact of weakening Euro against US Dollars on the businesses carried-out by Rain?
- The Company generates 45% - 50% of revenues from Plants located in Europe. About 10% of revenues from such
Plants are generated in US Dollars, for which costs are incurred in Euros. A 10% decline in Euro-Dollar Exchange rate would result in less than 2% decline in operating profitability in US Dollar terms.
- Weak Euro would make European products more competitive in international market resulting in improved capacity
utilization and higher operating profits.
Frequently Asked Questions
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