India based Zuari Agro Chemicals has reported reported a consolidated net profit of Rs 15.80 crore for the quarter ended September. Its net loss stood at Rs 226.08 crore in the year ago period.

 

Total income fell marginally by 3% YoY and stood at Rs 1,211.39 crore in the second quarter as against Rs 1250.91 crore in the corresponding period of the previous year.

 

The company is in the business of manufacturing and trading of various types of fertilizer products. In earlier periods, due to significant delays in receipt of subsidies, drought like situation in key marketing areas led to deterioration of the company's liquidity position along-with elongation of the working capital cycle of the company. Also, the company was unable to pass on the increase in the prices of the raw materials to the farmers which contributed to the cash flow mismatch and reduced financial flexibility of the company, on account of which the company is having net current liability position of Rs 1,536.76

crores as on September 30, 2020 (Rs 1,506.22 crores as of March 30, 2020). These factors adversely impacted company's cash flow, debt positions, delay in repayment of loans on contractual maturity date, recall of loans from two lenders due to non-meeting of covenant breach, downgrading of their rating to (ICRA) D and prolonged shut down of its plants for different periods during the previous year.

 

During the current quarter, in this unprecedented COVID pandemic situation, the urea plant has been continued in-spite of non-availability of bagging laborers. However, NPK A plant was intermittently closed and NPK B plant was under total shutdown up to October 30, 2020. From October 31, 2020, NPK B has commenced operations. With this all plants of the company are operation as on date, stated the company in its exchange filing.