HeidelbergCement India (500292) Q4 96/97 earnings summary

Executive summary

• Sales turnover fell to Rs. 348 cr from Rs. 386 cr; operating profit before interest and depreciation declined to Rs. 21.18 cr from Rs. 62.12 cr, resulting in a net loss of Rs. 13.78 cr versus profit of Rs. 35.57 cr.

• Cement despatches declined to 1.70 million tonnes from 1.83 million tonnes; capacity utilisation was 81.79%, slightly above the industry average of 81.27%.

Financial highlights

• Sales (net) were Rs. 347.75 cr versus Rs. 386.14 cr; net loss was Rs. 13.78 cr versus net profit of Rs. 35.57 cr.

• Interest outgo rose to Rs. 19.12 cr, up Rs. 6.16 cr; depreciation increased to Rs. 15.84 cr, up Rs. 2.25 cr.

• Equity dividend of 10% was recommended despite the operating loss; preference dividend of 15.33% was also proposed, subject to financial institution approval.

Outlook and guidance

• Captive power capacity was planned at all three plants, with the target of achieving this before the end of the current year to reduce reliance on state electricity supplies.

• Further planned projects were kept in abeyance due to economic conditions and liquidity; projects were to be reviewed when conditions improved.

• Longer-term prospects were supported by expected cement demand growth from infrastructure and housing, with scope to increase exports, particularly to SAARC countries.