Cosmo Films declares financial results for Q3 FY19

Company's net revenue increases by 22 percent

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Cosmo Films Limited, a global leader in specialty films for packaging, labeling and lamination applications and synthetic paper today declared its financial results for the quarter ended December 2018. The company has grown both in terms of net revenue and EPS during the quarter.

FY19 net revenue increased by 22% on year-on-year basis due to increase in sales volume (9%) and pass through of increase in raw material prices (13%).

In Rs. Crore Q3 FY19 Q3 FY18
Net Revenue 557.7 458.4
EBITDA 36.3 37.3
PAT 13.3 9.8
EPS (in Rs.) 6.9 5.1

The domestic film margins continued to decline until November. Besides there was an adverse impact from one-time inventory revaluation loss of Rs.9 crore due to sudden sharp fall in raw material prices towards December end. The results were also impacted by hedging cost/forex losses of Rs.4.5 crore (vs. Rs.3.4 crore gain in corresponding quarter).

Despite the adverse factors, the company maintained its EBITDA from increase in export margins, tax incentives on new investment and one-time gain of Rs 8 crore from sale of land and building in US subsidiary following the decommissioning of plant.

Tax Expense for the quarter ended 31 December’18 is net of deferred tax credit of Rs 3.7 crore with respect to temporary differences pursuant to filing of Income Tax Return for AY 2018-19.

Commenting on the financial performance of the company, Pankaj Poddar, CEO, Cosmo Films Ltd. said, “The demand and supply situation has started to get better with demand growth outpacing supply and the price recovery may start happening in the foreseeable future. The company has also stabilized its sales from additional capacity and therefore can focus better on improving prices and sales mix.

The US thermal film plant has been relocated to India. Shifting to India shall help the company to optimize cost and improve capacity utilization. The thermal film for sales in the US shall henceforth be entirely supplied from India.”

Cosmo’s film offerings include BOPP, CPP and soon to be launched BOPET films. Today, the company is the largest exporter of BOPP films from India and also the largest producer of thermal lamination films in the world. Its customer base is spread in more than 100 countries with plant cum distribution centers in India, the US, Korea and Japan.

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