The India Cements (INDIACEM) Q4 01/02 earnings summary

Executive summary

• FY02 ended in a net loss of ₹0.81cr, versus ₹48.15cr profit in FY01; weak cement volumes and prices were partly offset by a ₹118.89cr investment-sale gain.

• Near-term conditions remained difficult due to Southern market oversupply and depressed prices; medium- and long-term demand growth and cost-efficiency initiatives supported the outlook.

Financial highlights

• Sales/income from operations was ₹1,188.57cr in FY02, down 17.57% from ₹1,441.87cr; other income rose to ₹124.68cr from ₹9.50cr, including the investment-sale gain.

• PBT was a loss of ₹7.56cr versus profit of ₹51.15cr; PAT was a loss of ₹0.81cr versus profit of ₹48.15cr.

• Reported operating profit was ₹282.46cr versus ₹321.81cr, including the ₹118.89cr investment-sale gain; reported operating margin was 21.51% versus 22.17%.

Outlook and guidance

• Cement demand was expected to post double-digit growth in FY03, while short-term selling prices were expected to remain subdued; medium- and long-term prospects were viewed favorably.

• Planned priorities included debt and interest restructuring, further manpower rationalisation, and conversion of wet-process capacity to dry process as cash flows permit.

• The Vishnupuram 7.7 MW waste-heat power project was scheduled for commissioning by March 2004; Japan was to fund 70%–80% of its estimated ₹85cr cost.