Descon Oxychem Limited · PSX:DOL
Descon Oxychem — Q1 FY2024-25 Earnings Presentation
39 slides from Descon Oxychem's earnings presentation, 2024
Slide 1: Descon Oxychem Limited Investor Presentation Q-1 FY-2024-2025
DESCON OXYCHEM LIMITED Investor Presentation Q-1 FY-2024-2025 Mohsin Zia – CEO Muhammad Rizwan Qaiser – CFO Syeda Zainab Kazmi- FA [email protected] [email protected] [email protected] +92 322 7707198 +92 300 0634567 +92 302 8486856
Slide 2: Table of Content
TABLE OF CONTENT Introduction Corporate overview Business overview Production Overview Growth drivers Financial overview
Slide 3: Group profile
Group profile • Annual revenue over half a billion USD. • Descon has been in business for over 46 years. 3
Slide 4: Core values
Core values DESCON Values bind us together m SAFETY lly We believe HSE is of utmost importance em = and we attach the highest value to the safety of our employees and stakeholders. e ‘ LEADERSHIP We believe leaders inspire others to learn i@i and achieve more. O-n ACCOUNTABILITY AND OWNERSHIP y 4 We
Slide 5: Descon Oxychem Limited
Descon Oxychem Limited • Since its inception in 2008, Descon Oxychem has rapidly evolved to become the market leader in an intensely competitive Hydrogen Peroxide domestic market. Further we have also established a footprint in regional export markets. Our customers value us for our consistent quali
Slide 6: Vision and company profile
Company profile Vision Winning together with our customers, our ambition is to enhance local and regional footprint while delivering sustainable value to all stakeholders. Ambition 2025 About Descon Oxychem Today Incorporated 2004 We are a leading company in the Pakistan Hydrogen Peroxide market Sta
Slide 7: Goals and culture
Goals and culture A Framework for our Future OUR GOALS Profitable/ Manufacturin Engaged sustainable g Excellence Employees Sales Growth OUR PRIORITIES Customer Delight Openness & Honesty Lowest cost producer Corporate Governance Energy for change Innovation Diversity & Inclusiveness
Slide 8: Corporate Overview
Corporate Overview
Slide 9: Board of directors
Board of directors Taimur Dawood, Director Faisal Dawood, Chairman MD of Gray Mackenzie Engineering Services BV, the Netherlands Vice-Chair of Descon Engineering >15 years of work experience in product marketing, project finance, strategy development. and Served in management roles in the en
Slide 10: Management team
Management team Mohsin Zia, Chief Executive Officer M Rizwan Qaiser, Chief Financial Officer >27 years of diverse experience in Marketing Services, Finance processional with diverse experience in Manufacturing, Business Development, Sales Management, Supply Trading, Power, FMCG and Private Equit
Slide 11: Key Partners
Key Partners External Internal Credit Rating Auditors Auditors Agency Share Registrar Key Financing Partner 11
Slide 12: Milestones
Milestones 2004 2009 2011 2016 Incorporated as Got listed on KSE ISO 9001 Continues Plant Private Company Start of Commercial certification - SGS Debottlenecking under Companies Production First PAT of PKR 180 2nd PAT of PKR 45 Ordinance 1984 Million Million 2017 2018 2019 Highest
Slide 13: Milestones
Milestones 2020 2021 2022 Launch of Aseptox (Food Successfully completed Net profit of PKR 471(m), Grade) expansion project within despite impact of super Launch of SaniDol – Budget. tax, an increase of 69%, as Disinfectant and Sanitizer Cash Dividend of 10%. compared to prior period’s M
Slide 14: Milestones 2025 (Q-1)
Milestones 2023 2024 2025 (Q-1) Net profit of PKR. 1.4(bn), an increase of 197% as Net profit of PKR. 189.9(million) vs net compared to prior period’s net profit of PKR. Net profit of PKR. 507(million) vs net profit of Rs.198.9(million) SPLY 471(m) despite super tax impact of Rs.225 (m) profit
Slide 15: Shareholder Structure (as at June-24)
Shareholder Structure (as at 30 June-24) Major Shareholders No. of Shares % DESCON CORPORATION (PVT.) LIMITED (CDC) 10,051,697.00 6% DEL CHEMICALS (PRIVATE) LIMITED (CDC) 60,358,918.00 34% DESCON ENGINEERING LIMITED (CDC) 56,711,084.00 32% LOCAL / JOINT STOCK COMPANIES 4,726,632.00 3% FINANCIAL INST
Slide 16: Slide 16
Slide 17: Business Strategy
Sales & Marketing Increase share of profitable product/ market segment Retention & realignment of critical customer base Reduce reliance on textile segment Marketing of hydrogen peroxide brands of DOL. Creating a natural hedge against price depression in the local market through export and
Slide 18: Geographic footprint
Hi Geographic footprint PAKISTAN Ali Chemicals Saigal & Co M.M Trading Companygeg Beem Traders Kashif Chemicals + & Dyes Chemicals
Slide 19: Value chain
Value chain Suppliers Customers 19
Slide 20: Risk Management
Risk Management The objective of the ERM is to ensure that: Significant risks are identified, measured, analyzed and monitored; Sufficient, timely and accurate information is reported to the ERMC and Board Audit Committee; and Responses to identified risks are appropriately formulated and impl
Slide 21: Risk Management
Risk Management RISKS RISK RESPONSE Additional working capital employed/export Supply chain disruption focused Loan pre-payment through efficient working Interest rate hike capital management Increased packing cost Push for conversion to bulk Increased freight cost Ex. Factory supplies New Entrant L
Slide 22: Production Overview
Production Overview 22
Slide 23: Production process
Production process Oxygen Working solution with dissolved Hydrogen peroxide Oxidation Hydrogenated Working solution Demineralized Leftover Filtration water Hydrogen Hydrogen Extraction Peroxide Degassing Recycle catalyst Separated Filtration Water Pd Catalyst Water Separation Hydrogenation & drying
Slide 24: Health & safety (HS)
Health & safety (HS) Health and safety philosophy HS Way Forward 2025 Culture, Leadership 1 & Governance 1 DOL HSE Culture step transformation Enhance line Risk Recognition & responsibility & HS Philosophy 2 Mitigation ownership 2 Introduce Manage Continuous 3 sustainability targets 3 Improvement fo
Slide 25: UN Sustainability Goals For 2025
UN Sustainability Goals For 2025 17 Sustainable Development Goals 169 Sustainable Development Targets 25
Slide 26: Our Journey
Our Journey Dec 2023 Finalization of Sustainability Development Goals (SDGs) Completed Jan 2024 Target setting activity for short listed SDGs Completed FY 24-25 Progress & monitoring of targets FY 2024-25 On-Going Mar 2025 Issuance of 1st ESG Report for Descon Oxychem Limited Planned June 2025 Exter
Slide 27: ESG Targets for 2025
ESG Targets for 2025 UN Goal : By 2030, halve the number of global deaths and injuries from road traffic accidents DOL Target : Ensure Zero Traffic related LTI or Fatality of any DOL or contract employee UN Goal : Ensure women’s full and effective participation & equal opportunities for leadership a
Slide 28: ESG Targets for 2024-25
ESG Targets for 2024-25 UN Goal : Ensure access to affordable, reliable, sustainable and modern energy for all DOL Target : Convert 3% of total energy to renewable sources UN Goal : By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse DOL Target : Ensure
Slide 29: Business Overview
Business Overview
Slide 30: Competitive landscape and market share
Competitive landscape and market share Market Outlook Unique Competitive Advantages Plant Technology, Chematur (European) (DOL) vs Chinese (SPL) Targeted Capacity utilization is @ 103% (DOL) vs ??(SPL) Imports Only manufacturer with capability to produce food grade product ?? 42,000 MeT 50-60K
Slide 31: Product applications
Product applications Current Applications Potential Applications Mining Textile An oxidant, recovery agent Environmentally- or oxygen source friendly chemical used as bleaching agent Poultry Livestock Paper Food and beverages Cosmetics Water Treatment Sugar Disinfection (antimicrobial agent) 31
Slide 32: Business outlook
Business outlook • Diversification of product portfolio • Organic/In organic Growth • Efficient deployment of resources minimizing Fixed cost • Retention of Critical resource • Enhance export footprint • Efficient working capital Management !!! (from working capital reduction to revenue assurance mo
Slide 33: Financial Overview
Financial > ae eee ‘ 727 Vio Sai | ci Overview en a. ieee 1
Slide 34: Dividend policy, history and capital raising
Dividend policy, history and capital raising 2019 2008 All long-term loans- 2011 2013 CAPITAL RAISES Capital – PKR 1 Bln PKR 1,100 (pre-paid Inter-co Loan – Inter-co Loan – 100% in Foundation (2008) Syndicate Loan - PKR 409 M PKR 710 M Q-1(exc. 1.4 Bln TERF)(FY23)) DIVIDEND HISTORY Dividend Policy S
Slide 35: Financial highlights
Financial highlights Revenues (PKR m) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 629 621 788 1,700 1,498 1,514 - Q-1 FY-20 Q-1 FY-21 Q-1 FY-22 Q-1 FY-23 Q-1 FY-24 Q-1 FY-25 Revenues Linear (Revenues) EBITDA (PKR m) 900 60% 800 49% 50% 700 600 40% 500 28% 27% 24% 30% 400 836 300 16% 20% 14% 200 41
Slide 36: Financial highlights- YTD
Financial highlights- YTD Gross Profit (PKR m) 1000 60% 50% 50% 800 40% 600 26% 26% 30% 23% 400 20% 10% 11% 200 10% 144 64 89 843 387 397 0 0% Q-1 FY-20 Q-1 FY-21 Q-1 FY-22 Q-1 FY-23 Q-1 FY-24 Q-1 FY-25 Gross profit GP margin Net profit (PKR m) 31% 35% 1400 30% 1200 25% 1000 20% 800 13% 13% 15% 600
Slide 37: Financial highlights- YTD
Financial highlights- YTD Retained Earnings (PKR m) 1,800 1,600 1,400 1,200 1,000 800 1,652 1,505 600 1,124 400 200 322 182 196 - (200) Q-1 FY-20 Q-1 FY-21 Q-1 FY-22 Q-1 FY-23 Q-1 FY-24 Q-1 FY-25 RE Linear (RE) 37
Slide 38: Key Ratios
Key Ratios FY-19- FY-20- FY-21- FY-22- FY-23- FY-24- 20 Q-1 21 Q-1 22 Q-1 23 Q-1 24 Q-1 25 Q-1 EPS EPS EPS EPS EPS EPS 0.53 0.10 0.13 2.96 1.14 1.04 D/E D/E D/E D/E D/E D/E 105% 21% 31% 7% 5% 3% Current ratio Current ratio Current ratio Current ratio Current ratio Current ratio 1.76 0.98 1.84 1.65 1
Slide 39: Thank You Q&A
THANK YOU Q&A