UltraTech Cement (ULTRACEMCO) Q4 05/06 earnings summary

Executive summary

• FY06 net turnover rose 27% to Rs 3,299 crore; net profit reached Rs 230 crore versus Rs 3 crore, with NCCL consolidation affecting year-on-year comparability.

• Operating profit increased 59% to Rs 591 crore and operating margin improved to 18% from 14%, despite higher power, maintenance, employee and logistics costs.

Financial highlights

• Net turnover was Rs 3,299 crore versus Rs 2,607 crore; adjusted for traded volumes and VAT-related freight accounting, growth was 18%.

• Operating profit (PBIDT) was Rs 591.26 crore versus Rs 371.90 crore; gross profit (PBDT) was Rs 502 crore versus Rs 265 crore.

• Profit before tax was Rs 285.59 crore versus Rs 43.24 crore; net profit was Rs 229.76 crore versus Rs 2.85 crore, after prior-year diminution provision of Rs 76.84 crore.

• Consolidated turnover grew 25% to Rs 3,384 crore; consolidated net profit after minority interest was Rs 225 crore versus a loss of Rs 53 crore.

Outlook and guidance

• Rs 1,424 crore of capex is planned over three years, including Rs 844 crore for captive power plants in Gujarat and Chhattisgarh, plus debottlenecking and efficiency projects.

• Captive thermal power plants at Kovaya and Hirmi were expected to be commissioned by March 2008; management anticipated lower power costs after commissioning.

• Efficiency, logistics gains, alternative fuels and a higher value-added and blended-cement mix were identified as drivers of future earnings growth.