The India Cements (INDIACEM) Q4 00/01 earnings summary

Executive summary

• FY01 total income rose 2.23% YoY to Rs 1,451.37 crore; operating profit increased 11.74% to Rs 321.81 crore and net profit rose 6.27% to Rs 48.15 crore.

• Higher selling prices and plant efficiency supported results despite lower cement sales, sluggish southern demand and Rs 78 crore of input-cost increases.

Financial highlights

• Sales/income from operations reached Rs 1,441.87 crore versus Rs 1,406.45 crore in FY00; other income fell to Rs 9.50 crore from Rs 13.21 crore.

• Profit before tax was Rs 51.16 crore versus Rs 47.40 crore; profit after tax was Rs 48.15 crore versus Rs 45.31 crore.

• Interest expense rose 12.50% YoY to Rs 187.65 crore; depreciation increased 12.48% to Rs 83.00 crore, reflecting higher borrowings and asset additions.

• Recommended dividends: 11.5% on redeemable preference shares and Rs 1.80 per paid-up equity share, subject to calls in arrears.

Outlook and guidance

• FY02 cement demand growth was expected at 6–8%; normal monsoon conditions were anticipated to support a demand pickup and satisfactory performance in the remaining months.

• Medium- and long-term prospects were linked to infrastructure, housing and road development; industry demand was projected to exceed 200 million tonnes within a decade.

• Short-term demand-supply imbalances and price fluctuations remained likely amid surplus capacity and ~4 million tonnes of new southern capacity in the pipeline.

• A 15 MW Tamil Nadu gas power plant was proposed, with commissioning expected around July 2002; Sankari wet-to-dry process conversion was under consideration.