UltraTech Cement (ULTRACEMCO) Q4 06/07 earnings summary

Executive summary

• FY07 net revenue rose 49% to Rs.4,911 crore and net profit increased 240% to Rs.782 crore, driven by higher volumes, utilization and realizations.

• Prior-year comparisons include erstwhile Narmada Cement for Oct–Mar FY06 and are not fully comparable.

Financial highlights

• Net turnover was Rs.4,911 crore versus Rs.3,299 crore; operating profit (PBIDT) was Rs.1,479 crore versus Rs.591 crore.

• PBT reached Rs.1,166 crore versus Rs.286 crore; PAT was Rs.782 crore versus Rs.230 crore.

• Consolidated turnover increased 47% to Rs.4,969 crore; consolidated net profit after minority interest was Rs.785 crore versus Rs.225 crore.

• Operating margin improved to 30% from 18%; interest expense eased to Rs.87 crore from Rs.90 crore.

• EPS was Rs.62.84 versus Rs.18.46; dividend was Rs.4 per share, with the interim dividend treated as final.

Outlook and guidance

• Cement demand was expected to grow above 9%, linked to GDP growth; announced new capacity could create surplus supply and domestic price pressure from FY09.

• An additional 4 mtpa of capacity with a Karnataka grinding unit was expected to commission in March 2008, targeting South India demand.

• Captive power plants in Andhra Pradesh, Chhattisgarh and Gujarat were scheduled to commission from late FY08 through FY09, meeting around 80% of power needs.

• Priorities were sustainable plant performance, improved service standards and timely project commissioning.