Gulf Oil Q4 Net Profit up by 6%.

Gulf Oil Corporation Ltd., a Hinduja Group Company, has  reported a turnover of Rs. 1097 crores for the year ( Rs. 1081 crores ) and Net Profit of  Rs. 58.34 crores an increase of 10% over previous year. Turnover for Q4 was Rs. 312  crores ( Rs. 303 crores ) and net profit of Rs. 18.35 crores.

The Company has in the month of April 2014 paid an Interim Dividend of Rs.2.50 per share, i.e., 125% (110% + special dividend of 15%), a payout of 50%. The Board has recommended that the Interim Dividend be treated as the Final Dividend for the financial year 2013-14.

Division wise performance and highlights are as under:

LUBRICANTS BUSINESS

Demand conditions for lubricants continued to be subdued in Q4 impacted by lower goods movement, slowdown in mining, infrastructure segments and poor industrial growth factors. Despite these challenges, the Division grew its revenues in the 4th quarter of FY 2013-14. The net sales turnover increased to Rs. 255 crores as compared to Rs. 235 in the corresponding period last year, achieving a positive growth of 8% QoQ basis.

Operational Profit before Interest and Tax for the quarter has also gone up by 8.4% to Rs. 28.63 crores compared to Rs. 26.41 crores in the corresponding quarter of the previous year mainly on account of improvement in the product mix and sales realisations by the Division. Special promotional initiatives to gain market share in the diesel engine segment with trade retailer meets and retailer promotions were executed across key markets. For the year as well, the division has been able to maintain its Operational Profit before Interest and Tax clocking Rs. 105.46 crores compared to Rs. 105.68 crores in the previous year, inspite of the prevailing economic environment, negative growths in the commercial vehicle segment and slowdown in car / 2 wheeler segments.

The Lubricant Division has overall grown market shares with positive volume growth in the motorcycle segment & acquisition of new B2B customers across direct industries, infrastructure, mining segments from competition. Increase in distribution reach was achieved during the year with focused expansion initiatives. Season 2 of Leader Talk – a Gulf Oil sponsored program on CNN-IBN was telecast and the association with MTV Roadies continued in Q4 to ensure visibility and strengthen the brand across target audiences.

GULF OIL CORPORATION DEMERGER INTO TWO LISTED COMPANIES

The meetings convened by the Hon’ble High Court of Andhra Pradesh for Shareholders and Unsecured Creditors were held on 30th January, 2014.

The Chairman of the Shareholders Meeting appointed by the High Court conducted the meeting of all participants and proxy holders. Shareholders present at the Meeting holding 99.99% in person or through proxy voted for the resolution. Thereby approving the demerger of the Lubricants business of the Company, Gulf Oil Corporation Limited ( GOCL ) into a separate company ( wholly owned subsidiary of the Company ) namely Gulf Oil Lubricants India Limited ( GOLIL ). The GOLIL after receipt of the order of the AP High Court and other regulatory approvals will be listed as a separate entity.

The demerger of the lubricants business from the Company was planned in a way that on demerger, the lubricants business would have reached a turnover of around Rs. 1000 crores and will have several business initiatives and a large expansion project in hand to grow the business further.

On the other hand, the consolidated GOCL residual businesses from explosives, accessories and mining products would be approximately Rs. 400 crores. In addition, property income from Bangalore land development would be yielding revenues and cash inflows from Q 3 of 2014 – 15.


Therefore, with this demerger both the sides of the business would be in growth phases, with GOCL concentrating more on property development / realty, the acceleration in business on the GOCL side would change the business scenario for the Company at a fast pace.

The existing Share Capital of the Company is Rs. 19.83 crores and post demerger it will be split equally between GOCL and GOLIL at Rs. 9.915 crores each.

The process to be followed for the issue of new shares in the two companies has been given in the Notice to the shareholders issued on 31st December, 2013. At the end of the process, all existing shareholders will receive 1 share of GOCL ( FV Rs. 2/- ) and 1 share of GOLIL ( FV Rs. 2/- ) in place of 2 shares ( FV Rs. 2 /- ) held in GOCL as on the Record Date to be announced, after receipt of the Court Orders.

The Unsecured Creditors Meeting was also held and the Scheme of Arrangement was approved unanimously.

The results of the 2 ballots will be submitted to the AP High Court by the Chairmen of the Shareholders and Unsecured Creditors respectively for their orders in the matter. The appointed date for the demerger is 1st April, 2014.