UltraTech Cement (ULTRACEMCO) Q4 07/08 earnings summary

Executive summary

• FY08 net turnover reached Rs. 5,509 crore, up 12% YoY; net profit was Rs. 1,008 crore, up 29% YoY.

• Cement production rose 3% to 15.07 Mn tonnes; domestic cement volume increased 7% as exports were curtailed to meet local demand.

• Growth and cost-efficiency investments advanced, including a commissioned clinkerisation unit and captive power projects.

Financial highlights

• Gross sales were Rs. 6,286 crore versus Rs. 5,484 crore; net sales were Rs. 5,509 crore versus Rs. 4,911 crore.

• Operating profit (PBIDT) rose 23% to Rs. 1,820 crore; operating margin improved to 33% from 30%.

• PBT increased 29% to Rs. 1,507 crore; net profit rose to Rs. 1,008 crore from Rs. 782 crore.

• RMC sales climbed to Rs. 271 crore from Rs. 43 crore; other income increased to Rs. 100 crore from Rs. 61 crore.

Outlook and guidance

• Cement demand is expected to grow ~9%; new capacity could create surplus supply and pressure domestic prices from CY09.

• Priorities are sustaining plant performance, improving efficiencies and service standards, and commissioning projects on schedule.

• APCW expansion and the Ginigera grinding unit were expected to be operational in H1 FY09; expanded capacity would raise total capacity to 23.1 MMT.