Download CosmoFilmsQ2FY09

Cosmo Films Ltd. (CFL)

reported revenues of Rs2bn (+32%YoY)
in Q2FY09. This could be attributed to the dual effects of higher
volumes (+6%YoY) and realisations (+26%YoY).
Margins affected by volatility in PP prices
Cost of raw materials rose steeply by 560bps (as a % of sales) to
Rs1.4bn as Polypropylene (PP) prices soared to record levels of Rs110
per Kg in July’08. Also, implementation of ERP software at the company’s
plants necessitated a build-up of finished goods inventory. Additionally,
power and fuel costs also rose steeply by 80bps. These factors served
to dampen margins by 270bps YoY to 12%. Hence op. profit growth
was subdued at 8%, with op profits settling at Rs245mn.