HeidelbergCement India (500292) Q4 97/98 earnings summary

Executive summary

• 15-month period ended 30 Jun 1998 was described as the most difficult in the business’s history, amid recession, weak cement prices and rising input costs.

• Net loss widened to Rs 41.84 crore from Rs 13.78 crore in the prior 12-month year; no dividend was recommended.

Financial highlights

• Sales turnover was Rs 401.42 crore for 15 months, versus Rs 347.75 crore in the prior 12 months; periods are not directly comparable.

• Operating profit was Rs 18.86 crore versus Rs 21.18 crore in the prior year; interest expense rose to Rs 38.46 crore from Rs 19.12 crore.

• Depreciation was Rs 22.24 crore versus Rs 15.84 crore; net loss was Rs 41.84 crore, including prior-period and extraordinary items reflected in the accounts.

Outlook and guidance

• Government housing plans, infrastructure projects and potential further policy measures were expected to support cement demand, subject to implementation.

• Industry production target was projected to reach ~110 million tonnes by the end of the Ninth Plan, requiring 25 million tonnes of new capacity and ~Rs 10,000 crore investment over four years.

• A 15 MW thermal power plant was under installation at Damoh; commissioning was expected to make the plant power self-sufficient, while technology upgrades were expected to cut costs further.