JBF Industries eyes Rs 500cr profit in FY11

In an interview with CNBC-TV18, Rakesh Gothi, MD, JBF Industries, spoke about the results and his outlook for the company.

Below is a verbatim transcript of his interview with CNBC-TV18's Sonia Shenoy. Also watch the accompanying video. Q: Could you start off by telling us what the net profit number is this time around? A: The turnover went up to Rs 1,700 crore from Rs 1,190 crore reflecting an increase of 44%. The earnings before interest, taxes, depreciation, and amortization (EBITDA) went up to Rs 303 crore from Rs 104 crore, increase of 192%. The net profit number is up to Rs 186 crore from Rs 30 crore which is an increase of 534% which is more than five times increase. Q: What led to this huge jump in profit? Last quarter you did a net profit of about Rs 42 crore and this quarter it has jumped up all the way up to Rs 180 crore? A: The profitability in this current quarter is attributed mainly to the excellent performance of our polyester films division coming from UAE. The prices of films that we could fetch in the last quarter were somewhere in the range of USD 4,000 metric tonne as compared to the previous quarter that is last financial year last quarter, it was USD 1,899 metric tonne. So, the prices that we realised for polyester film were almost twice as compared to the corresponding period in the previous year. At the same time, the demand was good. Whatever we could produce, we could produce at a capacity utilisation of over 100% and whatever we could produce we could sell very easily in various markets. We also developed certain specialised markets for films in case of photovoltaic cells, as well as LCD panels for TV. So, all these activities resulted in a good profitability coming out of the polyester film division. Also, not to forget other divisions, which is POY. We also did very well in POY section. Having expanded the POY capacity in our Silvassa plant we could produce variety of PoY which were giving us better margins such as bright POY yarns or coloured POY yarns. In all those cases, we could better margins as compared to the previous corresponding period. Hence, these two main issues led to better margins in the current quarter. Q: So this quarter you have earned more than what you earned in the full year FY10, in FY10 net profits were standing at Rs 130 crore and this quarter itself you have earned about Rs 185 crore is that correct? A: Yes, PAT in the current quarter is Rs 185 crore. Q: So what would you do in FY11? How much would you jump from this Rs 130 crore and then going forward because of the way these film prices have surged up what kind of guidance could you give us for FY12 in terms of revenues and profits? A: At least we are very optimistic for the future. We are looking to close down, that is our internal target as we see it to close this year somewhere in the range of Rs 6,000 crore. Having already achieved an EBITDA of Rs 685 crore, we hope to have at least its our internal target that we should touch somewhere close to Rs 1,000 crore in terms of EBITDA number. Having already achieved Rs 385 crore in case of PAT, we hope to touch somewhere around Rs 500 crore in terms of PAT Q: That is for FY11, what about FY12? A: We expect at least a 10% improvement on all these numbers as we go forward into the next year.