The India Cements (INDIACEM) Q4 04/05 earnings summary

Executive summary

• FY05 returned to reported net profit of Rs.4.58 crore after three loss-making years, with improved operating performance and a one-time debt-settlement benefit; no dividend was recommended.

• Cement and clinker sales volume rose 9% to 63.75 lakh tonnes; higher volumes and realisations lifted operating profit 46% YoY.

Financial highlights

• Sales and other income increased 13.4% to Rs.1,402.30 crore; operating profit reached Rs.153.45 crore versus Rs.104.80 crore in FY04.

• Standalone PBT before extraordinary items was a loss of Rs.58.82 crore; net extraordinary income of Rs.63.40 crore produced PBT and PAT of Rs.4.58 crore.

• Interest and finance charges fell to Rs.133.50 crore from Rs.161.68 crore; depreciation was Rs.78.77 crore versus Rs.81.51 crore.

• Consolidated FY05 PAT was a loss of Rs.42.28 lakh versus a loss of Rs.96.57 crore in FY04; consolidated EPS was negative Rs.0.24 versus negative Rs.7.18.

• Standalone operating cash flow was Rs.214.18 crore; cash and cash equivalents closed at Rs.2.92 crore, down from Rs.3.72 crore.

Outlook and guidance

• FY06 cement demand was expected to grow ~10%; all-India demand was forecast to marginally exceed availability, with estimated demand of 134–136 million tonnes.

• April–May FY06 total cement and clinker sales rose 30% to 12.43 lakh tonnes YoY; cement production increased 35% and domestic cement sales rose 44%.

• Clinker export prices and volumes were expected to remain favourable over the next two years; full benefits from energy and cost initiatives were expected in FY06.