The Ramco Cements (RAMCOCEM) Q4 96/97 earnings summary

Executive summary

• FY97 sales and other income reached Rs. 419.69 crore; operating profit before interest, depreciation and tax rose to Rs. 139.76 crore, while profit after tax fell to Rs. 77.74 crore from Rs. 90.90 crore.

• Alathiyur was commissioned through clinkerisation in March 1997 and cement grinding in May; sales from the new plant began in June 1997.

Financial highlights

• Sales, including self-consumption and net of excise duty, were Rs. 404.07 crore versus Rs. 379.46 crore; total income, including wind-farm power and other income, was Rs. 419.69 crore versus Rs. 392.09 crore.

• PBIDT increased to Rs. 139.76 crore from Rs. 136.81 crore; profit before tax declined to Rs. 77.74 crore from Rs. 92.45 crore.

• Interest and finance charges rose to Rs. 31.01 crore from Rs. 19.39 crore, and depreciation increased to Rs. 31.00 crore from Rs. 24.98 crore, mainly due to the new cement project.

• Cash generated from operations was Rs. 129.61 crore; net cash from operating activities was Rs. 96.34 crore versus Rs. 76.39 crore in FY96.

Outlook and guidance

• Existing units were expected to sustain output in FY98, supplemented by Alathiyur production; all three units had diesel generator capacity for power-cut periods.

• Cement demand was expected to grow 9–10% annually on infrastructure and housing activity; regional imbalances were possible, but marketing the increased output was not expected to pose a major difficulty.

• Higher rail freight, coal prices, power tariffs and petroleum-related costs were expected to increase production and distribution costs; Alathiyur could enable freight rationalisation.

• A 56 cu. m/hour pilot ready-mix concrete plant near Chennai, costing Rs. 5 crore, was expected to be commissioned by November 1997.