HeidelbergCement India (500292) Q4 01/02 earnings summary

Executive summary

• FY02 net loss narrowed to Rs. 1,998.96 lakh from Rs. 6,091.84 lakh, supported by lower finance costs and cost controls, despite severe liquidity constraints and cement price pressure.

• Operations were disrupted by a 108-day Ammasandra shutdown; overall production and despatches nevertheless increased 5.2% and 4.9% YoY.

Financial highlights

• Sales were Rs. 36,083.48 lakh vs Rs. 34,134.57 lakh in FY01; total income was Rs. 36,697.97 lakh vs Rs. 34,755.57 lakh.

• Loss before tax narrowed to Rs. 2,738.25 lakh from Rs. 6,091.84 lakh; loss after tax was Rs. 1,998.96 lakh vs Rs. 6,091.84 lakh.

• Interest and financial charges fell to Rs. 2,940.46 lakh from Rs. 5,183.99 lakh, reflecting financial restructuring.

• Exceptional item: Rs. 466.30 lakh reversal of prior-year Mineral Area Development Cess provision following a favorable Supreme Court decision.

Outlook and guidance

• Cement industry growth was forecast at 7–8% in FY03, with housing demand, rural construction, infrastructure activity and a normal monsoon expected to support consumption.

• RBI forecast FY03 GDP growth of 6–6.5%, based on expected 7% manufacturing growth; demand recovery was expected to ease cement supply-demand imbalances and price declines.