Dalmia Bharat (DALBHARAT) Q4 11/12 earnings summary

Executive summary

• FY12 consolidated total income reached ₹2,418 crore and EBITDA ₹643 crore; cement sales volume rose 17% YoY to 5.4 Mt, outperforming South India market growth.

• Despite subdued economic growth and higher fuel and logistics costs, stronger realisations, alternative fuels and operating efficiencies supported improved earnings.

• Growth plans combine a proposed 2.5 Mt greenfield project with a North-East entry through Calcom, subject to an interim court order affecting the acquisition arrangements.

Financial highlights

• Consolidated total revenue was ₹2,417.73 crore vs ₹1,800.22 crore in FY11; EBITDA was ₹642.95 crore vs ₹419.10 crore.

• Consolidated PBT was ₹270.40 crore vs ₹71.40 crore; PAT was ₹143.45 crore vs ₹49.77 crore; diluted EPS was ₹17.67 vs ₹6.13.

• Excluding the ₹39.54 crore exceptional charge for pre-operative expenses/CENVAT credit written off, PBT before exceptional items was ₹309.94 crore.

• Consolidated operating cash flow was ₹406.48 crore vs ₹232.87 crore; cash and cash equivalents closed at ₹66.37 crore vs ₹454.32 crore.

Outlook and guidance

• FY13 strategy targets fuel-mix optimisation, greater pet coke and indigenous coal use, firmer pricing, joint procurement options and higher fly-ash usage.

• Planned commercial actions include stronger institutional sales, wider direct retail reach, focus on 15 districts and increased rail movement through Kadapa siding.

• A 2.5 Mt greenfield cement unit is planned over two to three years, expected to start by FY15; no other major expansion was planned amid industry surplus capacity.

• Cement demand outlook remained positive long term, while higher input costs were expected to constrain contribution and keep EBITDA stable despite stronger demand.