The India Cements (INDIACEM) Q4 98/99 earnings summary

Executive summary

• FY1998-99 operating profit before interest and depreciation rose to Rs.30,519.97 lakh from Rs.19,664.11 lakh; PAT increased to Rs.8,389 lakh from Rs.5,826.09 lakh, though prior-year comparisons are not comparable after Raasi integration and the shipping division transfer.

• Cement capacity expanded to 7 million tonnes across the group; market reach broadened across five southern and western states, and southern-market share rose to 24% from 15%.

Financial highlights

• Sales and other income were Rs.139,392.39 lakh vs Rs.89,751.61 lakh; cement sales reached Rs.132,772.22 lakh vs Rs.81,279.79 lakh.

• Profit before tax was Rs.8,704 lakh vs Rs.6,276.09 lakh; PAT was Rs.8,389 lakh vs Rs.5,826.09 lakh, after a Rs.315 lakh minimum alternate tax provision.

• Interest and other charges rose to Rs.15,183.54 lakh from Rs.8,489.34 lakh; depreciation increased to Rs.6,961.73 lakh from Rs.5,024.01 lakh.

• Proposed dividend was 35% (Rs.3.50/share), compared with 30% in FY1997-98; proposed dividend including dividend tax totaled Rs.2,593.51 lakh.

Outlook and guidance

• Cement production for H1 FY1999-2000 rose 15% YoY to 29.42 lakh tonnes and sales rose 12% to 28.37 lakh tonnes; prices strengthened from July 1999 as southern demand improved.

• A 15 MW power plant using allocated natural gas is planned to reduce energy costs; higher wind generation is expected to lift windfarm revenue in FY1999-2000.

• FY1999-2000 cement operations target further production and energy-cost improvements; proposed measures are expected to cut power use by 4–5 KWh/tonne and heat use by 40 Kcal in dry-process plants.