UltraTech Cement (ULTRACEMCO) Q4 04/05 earnings summary

Executive summary

• FY05 net turnover rose 19.1% to Rs 2,681.05 crore, while net profit fell to Rs 2.85 crore from Rs 38.83 crore; a Rs 76.84 crore investment impairment drove a reported pretax loss.

• Grasim took management control on 6 July 2004; the transition to UltraTech Cement was smooth, and synergies with Grasim became a focus.

Financial highlights

• Net turnover was Rs 2,681.05 crore versus Rs 2,251.13 crore; exports contributed Rs 514.36 crore versus Rs 392.66 crore.

• Operating profit was Rs 371.90 crore, down 1.8% YoY; operating margin was 13.9% versus 16.8%, reflecting higher power, fuel and logistics costs.

• PBT before diminution was Rs 43.24 crore versus Rs 49.20 crore; after the Rs 76.84 crore impairment, reported PBT was a loss of Rs 33.60 crore.

• Net profit was Rs 2.85 crore versus Rs 38.83 crore; basic and diluted EPS was Rs 0.23 versus Rs 3.12.

• Adjusted for the Rs 76.84 crore impairment and Rs 12.60 crore additional deferred-revenue write-off, core profitability was affected by rising operating costs and Rs 25 crore of brand-transition expense.

Outlook and guidance

• Plans centered on asset sweating, efficiency gains, cost control—especially power, fuel, energy and logistics—and continued synergy realization with Grasim.

• Around Rs 200 crore was planned for plant modernization and higher blended-cement share; a Gujarat captive thermal power plant was planned at around Rs 620 crore.

• Demand outlook was supported by infrastructure investment, housing and industrial growth; market oversupply and coal shortages tempered expectations.