Dalmia Bharat (DALBHARAT) Q4 10/11 earnings summary

Executive summary

• FY11 marked completion of the Cement, Sugar and Refractory restructuring, KKR’s first investment tranche, stabilization of new plants and launch of the next expansion phase.

• Cement volumes rose 14% to 4.6 MnT despite 6% national demand growth; consolidated EBITDA was ₹3,863 million and PAT ₹498 million.

• Two greenfield plants ramped up; the Southern market share reached 8.1%, while a further 2.5 MnT greenfield project was planned.

Financial highlights

• Consolidated net turnover was ₹17,459 million after ₹2,231 million excise duty; other income was ₹542 million and total income ₹18,001 million.

• Consolidated EBITDA was ₹3,863 million; operating expenses were ₹13,811 million, depreciation ₹1,753 million and financial expenses ₹1,723 million.

• Consolidated PBT was ₹714 million, tax expense ₹611 million and PAT ₹498 million, including ₹519 million share of associate profit and ₹125 million minority interest.

• Consolidated EPS was ₹6.13; cement sales volumes rose 14% from 4.1 MnT to 4.6 MnT YoY.

Outlook and guidance

• Cement demand was expected to grow 8–9% in FY12 and FY13; anticipated capacity additions were 24 MnT nationally in FY12 and 30 MnT in FY13.

• FY12 capacity utilization was expected to remain near FY11 levels—about 75% nationally and 65% in the South—with improvement expected as additions slow and demand catches up.

• A 2.5 MnT greenfield cement project was intended to start operations by the next upcycle; expansion was to proceed in stages, with inorganic options also under review.

• Refractory margins were expected to remain pressured; diversification into coke oven, steel and glass markets was planned.