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Rain Industries Limited (Formerly Rain Commodities Limited)
Corporate Presentation – May 2015
2
Forward Looking Statement
Forward-looking statements should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of the times at, or by which, such performance or
results will be achieved. Forward-looking information is based on information available at the time
and/or management’s good faith belief with respect to future events, and is subject to risks and
uncertainties that could cause actual performance or results to differ materially from those
expressed in the statements.
Forward-looking statements speak only as of the date the statements are made. The Company
assumes no obligation to update forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting forward-looking information except to the extent
required by applicable securities laws. If the Company does update one or more forward-looking
statements, no inference should be drawn that the Company will make additional updates with
respect thereto or with respect to other forward-looking statements.
Rain Group – Business Verticals and Geographical Presence
4
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
of 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
of an aggregate capacity of 125 MW in
India and US
• Additional CTP Plant of 0.3
Million Tons in Russia is
expected to commence
operations during Q4
of 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.
5
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
of 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 of Phthalic Anhydride (“PA”)
Project in Belgium
Rain Group – Key Milestones
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
Industry Updates
8
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
of 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 of 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.
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.
10
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
11
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
12
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
0
5
10
15
20
25
0
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
0
2013 2014 2015E 2016E 2017E 2018E 2019E
13
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
0
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)
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
Rain Group – Financial Snapshot
16
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
17
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
(%)
18
Business Concentration – Q1-2015
Carbon 70%
Chemical 20%
Cement 10%
Revenue Breakdown
Carbon 73%
Chemical 15%
Cement 12%
EBITDA Breakdown
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
Sale
s V
olu
me
in M
illio
n T
on
s
CPC CTP & Others GPC - Trading
Carbon Products – Sales Volumes
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 %
R
eve
nu
e IN
R in
Mill
ion
CPC Others GPC EBITDA MarginNotes: 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
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
EB
ITA
Marg
in
Rev
en
ue
INR
in M
illio
ns
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
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
Pe
r MT R
eve
nu
e IN
R in
Mill
ion
s
Revenue EBITDA Per Ton
Cement – Revenue & EBITDA Margins
23
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
Millio
ns
INR
Millio
ns
US
$ M
illio
ns
Equity
Fall in Equity is due to fall in Euro – INR Exchange rate resulting in lower FCTR
24
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
25
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 )
26
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 of the Aluminium industry
Eco-friendly Energy Generation through
Waste Heat Recovery
Key Strengths
Global Market Presence with
World-class Asset Base
Rain Group
27
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
Annexures
29
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
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
2008Payout Ratio 11.9%
2009Payout Ratio 6.8%
2010Payout Ratio 15.7%
2011Payout Ratio 11.4%
2012Payout Ratio 15.9%
2013Payout Ratio 8.9%
2014Payout 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
31
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 of 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
32
• What is the Impact of falling Crude Oil / Commodity prices on the businesses carried-out by Rain?
o 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.
o Prices of certain Carbon products and Chemical Products manufactured by the Company are indexed to Crude Oil or other Commodity prices. As both Raw-materials and Finished Products in Coal Tar Distillation are indexed to Crude Oil or Other Commodity prices with a lag of few months, there is no impact of falling Crude Oil or other Commodity prices on 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?
o Prices of CPC and CTP are not indexed to Aluminium prices and they are influenced by their own supply-demand dynamics.
o 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?
o 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
33
• What are the plans for de-leveraging the Company, considering the high-leverage?
o 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.
o 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.
o With no major repayments in next three-years; the Company is well positioned to meet all repayment obligations.
o 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?
o 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.
o 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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In case of any further details, please contact:
India:
Anil Kumar Upadhyay Phone: +91 40 4040 1234
Direct: +91 40 4040 1252
Email: [email protected]
US:
Ryan Tayman Tel: +1 203 5172 822
Email: [email protected]
