Shree Cement (SHREECEM) Q4 96/97 earnings summary

Executive summary

• Reported results cover 15 months ended 30 June 1997, versus 12 months in the prior period; revenue and profit comparisons are therefore not directly comparable.

• Higher production and commissioning of the second Beawar plant supported performance, while cement-market recession, lower realizations and liquidity pressure led to no dividend recommendation.

Financial highlights

• Sales and income were Rs. 25,931.35 lacs for 15 months, versus Rs. 21,842.44 lacs for the 12 months ended 31 March 1996.

• Operating profit before interest, depreciation and tax was Rs. 5,433.24 lacs; profit before tax was Rs. 3,806.08 lacs and profit after tax was Rs. 3,554.08 lacs.

• Interest and other financial expenses were Rs. 719.78 lacs; depreciation was Rs. 907.38 lacs, including the effect of the stated depreciation policy.

• Operating cash flow was Rs. 3,036.54 lacs for the 15-month period, versus Rs. 2,120.55 lacs for the prior 12 months.

Outlook and guidance

• The additional 12.4-lakh-tonne annual-capacity unit was expected to lower overall production costs and improve competitiveness as output and distribution expanded.

• Raj Cement began clinkerisation on 27 March 1997; grinding operations commenced in October 1997, with the project completed on schedule and within overall project cost.

• Expanded capacity, the Shree brand and a wider distribution network were expected to support stronger sales and profits in coming years.