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UltraTech Cement Q2 profit up 55% on strong revenue, EBITDA

The News International Team

Aditya Birla Group company UltraTech Cement beat street expectations on every parameter with the second quarter standalone net profit soaring 55.24 percent to Rs 410 crore on strong topline, operational and other income but impacted by finance, power and freight cost. Profit in the year-ago period was Rs 264.1 crore.

Profit was expected at Rs 338 crore on revenue of Rs 5,150 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Revenue during the quarter grew by 20 percent to Rs 5,429 crore in the quarter ended September 2014 compared to Rs 4,523 crore in same quarter last year driven by higher cement sales volumes.

“The combined cement and clinker sales increased by 12.25 percent on yearly basis to 10.35 million tonne while white cement and wall care putty sales rose to 3.02 lakh metric tonne from 2.94 lakh metric tonne,” said the company in its filing to BSE.

It added that domestic cement sales volume climbed 11 percent on the back of higher demand and additional volume from the acquired units in Gujarat. UltraTech acquired two cement units in Gujarat from Jaypee Cement.

On the outlook front, UltraTech said the cement demand is slated to grow over 8 percent. The key drivers will be renewed government focus on housing and infrastructure spending, it added.

Other income doubled to Rs 74.1 crore in July-September quarter from Rs 37.6 crore in corresponding quarter of last fiscal.

Operating profit of the cement company spiked 29.2 percent year-on-year to Rs 877 crore and margin expanded by 120 basis points to 16.2 percent during the same period, but impacted by higher fuel and freight cost. According to the poll, both were expected at Rs 840 crore and 16.3 percent, respectively.

Cost

Raw materials cost increased by 16 percent to Rs 787.4 crore from Rs 677.5 crore on yearly basis. “Costs were impacted mainly on account of increase in prices of petcoke, input material and royalty on limestone,” said the company.

Power and fuel cost shot up 33.7 percent Y-o-Y to Rs 11,44.9 crore from Rs 856.6 crore while freight and forwarding expenses rose 30 percent to Rs 1,292 crore from Rs 994.22 crore.

Finance cost jumped 61.6 percent to Rs 143.4 crore in July-September quarter compared to Rs 88.75 crore on higher borrowings for (Jaypee) cement units acquisition. Long term borrowings stood at Rs 5,230.2 crore as of September 2014, increased compared to Rs 4,493.6 crore at the end of March 2014 and short term borrowings were Rs 2,582.4 crore at end of September quarter, up significantly compared to Rs 379.2 crore at the end of March 2014.

Depreciation cost climbed 17.5 percent Y-o-Y to Rs 302.4 crore and other expenses soared 14 percent to Rs 969.7 crore but tax expenses declined to Rs 95.4 crore from Rs 107 crore during the same period.

Capex

UltraTech said the ongoing capex is on track, adding it commissioned a 1.4 million tonne cement mill at Rajashree Cement in Karnataka and a 25MW thermal power plant in Andhra Pradesh.

With this the company’s total cement capacity in India increased to 60.2 million tonne and the total power capacity rose to 733 MW (which caters to around 80 percent of the total power requirement).

On consolidated basis, profit after tax climbed to Rs 416 crore in the quarter ended September 2014 compared to Rs 283 crore in same quarter last year. Net sales during the quarter jumped to Rs 5,723 crore from Rs 4,849 crore year-on-year.

Meanwhile, the board of directors of the company today extended the term of appointment of OP Puranmalka, managing director, for a period of one year i.e. from April 01, 2015 to March 31, 2016 and appointed Atul Daga as chief financial officer in place of KC Birla, with effect from December 01, 2014.

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