DREDGING CORP 2019-20 Annual Report Analysis

Tue, 31 Mar

DREDGING CORP has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

DREDGING CORP Income Statement Analysis

• Operating income during the year rose 8.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 16.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.5% in FY20 as against 24.1% in FY19.
• Depreciation charges increased by 3.7% and finance costs decreased by 6.9% YoY, respectively.
• Other income grew by 15.4% YoY.
• Net profit for the year declined by 85.5% YoY.
• Net profit margins during the year declined from 5.5% in FY19 to 0.7% in FY20.

DREDGING CORP Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	6,917	7,497	8.4%
Other income	Rs m	77	89	15.4%
Total Revenues	Rs m	6,994	7,586	8.5%
Gross profit	Rs m	1,671	1,389	-16.9%
Depreciation	Rs m	1,129	1,171	3.7%
Interest	Rs m	185	172	-6.9%
Profit before tax	Rs m	434	134	-69.1%
Tax	Rs m	53	79	47.8%
Profit after tax	Rs m	380	55	-85.5%
Gross profit margin	%	24.1	18.5
Effective tax rate	%	12.3	58.9
Net profit margin	%	5.5	0.7

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DREDGING CORP Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 5 billion as compared to Rs 4 billion in FY19, thereby witnessing an increase of 33.8%.
• Long-term debt down at Rs 4 billion as compared to Rs 5 billion during FY19, a fall of 20.9%.
• Current assets rose 10% and stood at Rs 8 billion, while fixed assets fell 4% and stood at Rs 17 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 25 billion as against Rs 25 billion during FY19, thereby witnessing a growth of 0%.

DREDGING CORP Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	15,749	15,702	-0.3
Current Liabilities	Rs m	3,502	4,686	33.8
Long-term Debt	Rs m	5,203	4,117	-20.9
Total Liabilities	Rs m	24,599	24,680	0.3
Current assets	Rs m	7,294	8,050	10.4
Fixed Assets	Rs m	17,304	16,630	-3.9
Total Assets	Rs m	24,599	24,680	0.3

DREDGING CORP Cash Flow Statement Analysis

• DREDGING CORP's cash flow from operating activities (CFO) during FY20 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 59 million, an improvement of 69.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -1 billion, an improvement of 2% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -186 million from the Rs 67 million net cash flows seen during FY19.

DREDGING CORP Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	1,481	1,173	-20.8%
Cash Flow from Investing Activities	Rs m	35	59	69.6%
Cash Flow from Financing Activities	Rs m	-1,449	-1,418	-
Net Cash Flow	Rs m	67	-186	-

Current Valuations for DREDGING CORP

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.0, an decline from the EPS of Rs 13.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 145.9, stands at 74.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.3 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 6.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	247.0	267.7
TTM Earnings per share	Rs	13.6	2.0
Diluted earnings per share	Rs	13.6	2.0
Price to Cash Flow	x	7.9	6.5
TTM P/E ratio	x	26.8	74.1
Price / Book Value ratio	x	0.9	0.5
Market Cap	Rs m	13,412	7,928
Dividends per share (Unadj.)	Rs	3.0	0.0

Ratio Analysis for DREDGING CORP

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY20, from 2.1x during FY19. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 1.8x during FY20, from 3.4x during FY19. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 0.4% during FY20, from 2.4% during FY20. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 1.5% during FY20, from 3.0% during FY19. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 0.9% during FY20, from 2.3% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	2.1	1.7
Debtors’ Days	Days	1,346	1,224
Interest coverage	x	3.4	1.8
Debt to equity ratio	x	0.3	0.3
Return on assets	%	2.3	0.9
Return on equity	%	2.4	0.4
Return on capital employed	%	3.0	1.5

To see how DREDGING CORP has performed over the last 5 years, please visit here.

DREDGING CORP Share Price Performance

Over the last one year, DREDGING CORP share price has moved down from Rs 427.0 to Rs 145.9, registering a loss of Rs 281.1 or around 65.8%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for DREDGING CORP and quarterly results for DREDGING CORP)

Read: Latest Annual Report Analysis of DREDGING CORP