The India Cements (INDIACEM) Q4 96/97 earnings summary

Executive summary

• FY97 delivered operating profit of Rs 17,400.72 lakh and PAT of Rs 8,258.16 lakh; cement production was 25.50 lakh tonnes and clinker output reached a record.

• Dalavoi was commissioned through clinkerisation in March 1997, with cement grinding and packing commissioned subsequently; benefits were expected in FY98.

• A 30% equity dividend was recommended, down from 45% in FY96.

Financial highlights

• Sales and other income were Rs 83,249.53 lakh vs Rs 80,643.94 lakh in FY96; cement sales including excise duty were Rs 72,881.35 lakh vs Rs 67,769.81 lakh.

• Operating profit before interest and depreciation rose to Rs 17,400.72 lakh from Rs 15,623.89 lakh; PBT was Rs 8,254.49 lakh vs Rs 8,074.22 lakh.

• PAT was Rs 8,258.16 lakh vs Rs 8,090.32 lakh, including a Rs 3.67 lakh prior-year adjustment; FY97 tax provision was nil.

• Interest expense increased to Rs 4,841.91 lakh from Rs 3,982.27 lakh; depreciation rose to Rs 4,406.63 lakh from Rs 3,662.94 lakh.

• Operating cash flow was Rs 3,965.11 lakh vs Rs 8,950.30 lakh in FY96.

Outlook and guidance

• Cement demand firmed from March 1997 and remained firm in FY98; April–May cement production was 4.74 lakh tonnes vs 4.00 lakh tonnes, and sales were 4.86 lakh tonnes vs 4.20 lakh tonnes.

• Dalavoi commenced cement dispatches and was expected to contribute significantly to FY98 turnover and profitability.

• Shipping prospects were expected to improve from H2 FY98 on anticipated Indian imports of foodgrains, fertilisers and coal, despite depressed freight rates.

• A 2500 TCD sugar project was expected to be completed by end-1998; major machinery letters of intent had been issued.