Q2 Results: UPL’s Profit Misses Estimates On One-Time Expense
Date:11-08-2019
UPL Ltd.’s quarterly profit missed estimates because of a one-time expense.
Net profit was Rs 89 crore in the quarter ended September, the agro-chemical maker said in an exchange filing. Analysts tracked by Bloomberg had estimated the metric at Rs 516 crore. The company had reported a profit of Rs 270 crore a year ago.
Profitability was negatively impacted by an exceptional cost of Rs 305 crore on the back of litigation expenses in one of its subsidiaries in the U.S. and integration costs associated with acquiring Arysta Lifesciences, the company said in notes accompanying the earnings. The year-on-year profit figures can’t be compared as the company started incorporating financials of Arysta Lifesciences starting quarter ended March.
AgroFresh Solutions Inc. had filed a lawsuit against UPL’s subsidiary Decco for infringing its patent on a technology that keeps apples fresh in storage after harvest. In October, a federal jury in Wilmington, Delaware, ordered UPL and Decco to pay AgroFresh $31 million (approximately Rs 217 crore). This amount was provided for in the quarter as an exceptional item, the company said in the exchange filing.
UPL’s revenue for the three-month period was Rs 7,817 crore—in line with the Rs 7,874-crore estimate. Operating profit stood at Rs 1,539 crore, in line with the Rs 1,628-crore forecast. Margin remained flat at 19.7 percent, hurt by higher raw material prices, against the estimated 20.7 percent. A foreign exchange loss of Rs 92 crore also affected operational performance.
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