It is indeed my honour to communicate with you for the first time asthe Chairman of your Company. As some ofyou may be aware while I have over 30 years ofexperience in the gases industry in my role as the Regional Business Unit Head - Southand East Asia of the Linde pic Group spanning over 5 years till early 2019 myresponsibility included guiding the Group's gases and engineering business in Linde India.
I am happy to observe that the year 2019 has been an exceptional yearfor Linde India. Despite several challenges during 2019 that included tariff war betweenUS and China slowing economies across the globe weak financial markets and the signs ofslowdown in the Indian economy your Company put up a resilient performance in both thegases and engineering businesses. This resilience was seen across several importantfunctions and areas such as people safety strategy plant operations pricing actionsand operating profits etc. results of which are reflected in the overall financialperformance for the year 2019. While People remain the core of your Company's successSafety always comes first. Your Company's commitment to high standards of safety has wonaccolades from large onsite customers in the gases business and at some of the majorproject sites in the project engineering business.
It gives me pleasure to state that your Company has delivered arecord-breaking performance by clocking its highest ever earnings before interestdepreciation and amortisation (EBITDA) of Rs.4356.54 million during the year 2019. Thishas become
possible on the back of resilience shown by the Company in both thegases and project engineering businesses. Besides the successful divestment of the"South Region Divestment Business" as per the Order of the CompetitionCommission of India as a condition for approving the global merger of Linde AG andPraxair Inc. has resulted in an exceptional profit of Rs. 8407.55 million. The netprofit after tax stood at Rs. 7271.79 million. The Directors' report deals with this inmore detail and I am indeed thankful to all the shareholders for their support on thisagenda. While some of the potential synergies arising from the global merger were alreadyembedded in existing businesses I am happy to state that your Company's Board ofDirectors has in March 2020 approved a joint venture between Linde India and Praxair Indiaafter detailed evaluation of appropriate integration plans for realizing the remainingsynergies between the competing/synergistic businesses of both the companies in India. Thejoint venture company is now functional and I am sure this will deliver the desiredsynergies to further improve the operating performance of Linde India in the years tocome. Your Company is also focused on digitalization and several initiatives have beenimplemented to enhance the business model and the distribution efficiency of your Company.
Let me now also share my thoughts on Covid-19 the most disruptiveevent in the modern human history. At the time of writing this message most of the Worldincluding India is being significantly impacted by this pandemic. During these difficulttimes it is indeed satisfying that the Linde India
management team has worked tirelessly to implement mitigation plans toensure the well being of all our stakeholders that is customers employees suppliersetc. as well as the financial health of the Company.
We realise the current situation is very dynamic and is evolving. I amconfident in our preparation and contingency planning to overcome this crisis together.Linde India is built on a strong foundation backed by the financial and technologicalstrength of its promoter diverse customer base and a focused management team these arefundamental in successfully navigating through this pandemic.
There is no doubt today that the Covid-19 has made our world morechallenging than ever before. This has severely impacted revenues and profits of mostcompanies in India and elsewhere in the world. The markets worldwide have thereforealready factored huge impact on earnings in the current financial year though there issome buoyancy with unlock phase 1 in India and hope of a vaccine being available soonerrather than later. In view of this though the short-term outlook may appear somewhatgrim I am cautiously optimistic about the medium to long term future as your Companyremains resilient to overcome the diverse challenges.
|Warm regards |
|RJ Hughes |
|30 July 2020 |