Shree Cement (SHREECEM) Q4 04/05 earnings summary

Executive summary

• Record cement output of 3.016 Mt and higher price realisations drove gross turnover to Rs 723.03 crore, up 19% YoY; PAT rose to Rs 29.07 crore from Rs 13.04 crore.

• Capacity utilisation reached 116%, versus an industry average of 84%, as production exceeded installed capacity through de-bottlenecking and improved asset use.

Financial highlights

• Gross sales were Rs 723.03 crore versus Rs 606.93 crore; sales volume rose 7.7% to 3.06 Mt and reported price realisation increased 11%.

• Operating profit increased to Rs 173.93 crore from Rs 132.36 crore; EBITDA margin improved to 30% from 28%.

• PAT was Rs 29.07 crore versus Rs 13.04 crore; EPS rose to Rs 8.34 from Rs 3.74 and cash EPS to Rs 43.53 from Rs 26.83.

Outlook and guidance

• Production vision is 10 MTPA by 2010, supported by de-bottlenecking, higher asset utilisation, productivity gains and capacity investments beyond the Ras project.

• FY05-06 production target is 3.15 Mt, with ROC targeted at 50% of output and power consumption at 73 units per tonne.

• Cement demand is expected to grow 7–8% over the next few years; the 1.2 MTPA Ras plant was scheduled to start in Q3 FY05-06.