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PRESS
RELEASE
29
April 2010
UltraTech
Cement announces financial results for year ended 31 March
2010
Click
here to view the results
- Entry
into the Middle East to acquire controlling stake in ETA
Star Cement
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(Rs.
crore)
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Particulars
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FY
10
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FY
09
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%
change
|
|
Net
sales
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7,050
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6,383
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10
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PBDIT
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2,094
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1,810
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16
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| PAT |
1,093
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977
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12
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UltraTech
Cement, an Aditya Birla Group company, today announced its
financial results for the year ended 31 March 2010.
Financials
– FY 2010
The company has achieved net revenues of Rs.7,050 crore (Rs.6,383
crore) registering a growth of 10% on the back of higher sales
volume. Profit before interest, depreciation and tax was Rs.2,094
crore (Rs.1,810 crore). Profit after tax at Rs.1,093 crore
was up by 12% after providing for interest of Rs.118 crore
(Rs.126 crore), depreciation of Rs.388 crore (Rs.323 crore)
and tax of Rs.495 crore (Rs.384 crore). Cash profit at Rs.1,589
crore (Rs.1,481 crore) was higher by 7%.
The company
produced 17.6 MMT of cement (15.9 MMT) reflecting a rise of
11%. The effective utilisation on expanded capacity was 88%
(96%). Domestic sales volume at 17.8 MMT (15.8 MMT) was up
by 13%, while overall sales volume registered a growth of
11% from 18.2 MMT in FY09 to 20.2 MMT in FY10.
The company
has a strong balance sheet with a debt equity ratio of 0.35
and an interest cover of more than 14 times.
Financials
– Q4FY10
The company achieved net revenues of Rs.1,909 crore (Rs.1,860
crore), higher by 3%. Profit before interest, depreciation and
tax was Rs.428 crore (Rs.562 crore). Profit after tax at Rs.229
crore (Rs.309 crore) was lower by 26% after providing for interest
of Rs.28 crore (Rs.34 crore), depreciation of Rs.99 crore (Rs.91
crore) and tax of Rs.72 crore (Rs.128 crore).
The company
produced 5.0 MMT of cement (4.6 MMT) up by 8%. Effective capacity
utilisation on expanded capacity was 97% (107%).
Domestic
and export realisation was lower as compared to Q4FY09. This
has impacted profitability to some extent.
Acquisition
of ETA Star Cement in UAE, Bahrain and Bangladesh
The Board at its meeting today approved the acquisition of ETA
Star Cement Company LLC, Dubai, together with its cement operations
in United Arab Emirates (UAE), Bahrain and Bangladesh. The acquisition
will be carried out by capitalising ‘UltraTech Cement Middle
East Investments Limited’ (“UCMEIL”), the company’s
wholly-owned subsidiary in UAE.
ETA Star
Cement is promoted by the ETA Group. ETA Group is a leading
UAE conglomerate involved, among other things, in engineering
and construction, shipping, commodity trading, auto trading,
building materials, property development and retail businesses.
ETA Star
Cement’s manufacturing facilities include a 2.3mtpa clinkerisation
plant and 2.1mtpa of cement grinding capacity in the UAE,
0.4mtpa and 0.5mtpa of cement grinding capacity in Bahrain
and Bangladesh respectively. UCMEIL will acquire management
control and equity stake at all the locations. The enterprise
value of these assets works out to around Rs.1,700 crore.
UltraTech
Cement, India, currently exports cement and clinker to the
Middle East. With this acquisition, it will gain direct access
to the markets in the Middle East and adjoining regions.
Remarks
Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group, “The
acquisition of ETA Star Cement marks the entry of the Aditya
Birla Group Cement Business into the Middle East. It is in
line with our long-term strategy of expanding our global presence
across businesses and is consistent with our vision of taking
India to the world.”
Mr. O.
P. Puranmalka, Whole-time Director of the company, said, “The
acquisition of ETA Star Cement will give us immediate scale
and a footprint in the Indian Ocean Rim without disturbing
the market matrix. This acquisition together with the amalgamation
of Samruddhi Cement with UltraTech will enhance UltraTech’s
capacity to around 52mtpa.”
Commenting on the acquisition, Mr. K.C. Birla, CFO, UltraTech
Cement said, “This acquisition fits in with the company’s
growth strategy and will add value for its stakeholders. The
transaction is also EPS accretive. We will use a judicious
mix of internal accrual and borrowings for funding the same.
The acquisition
of Star Group is likely to be completed by the end of Q1FY11.
Dividend
The Board of Directors at their meeting held today recommended
a dividend of 60%, at the rate of Rs.6/- per share of face value
of Rs.10/- each aggregating to Rs.74.69 crore. The company will
absorb the corporate tax on dividend amounting to Rs.12.41crore,
resulting in a total payout of Rs.87.10 crore.
Scheme of Amalgamation
The Board of Directors at its meeting held on 15 November 2009
approved a Scheme of Amalgamation (“the Scheme”) of
Samruddhi Cement Limited (“Samruddhi”) with the company
in terms of the provisions of sections 391 to 394 and other
relevant provisions of the Companies Act, 1956. The Scheme has
also been approved by the shareholders, secured creditors (including
debenture holders) and unsecured creditors of the company. The
appointed date of the Scheme is 1 July 2010 or such other date
as may be determined by the Board of Directors of the company
and Samruddhi.
Petitions
seeking sanction for the Scheme have been filed with the high
court at Bombay and high court at Gujarat. The Scheme will
be effective after sanction from the respective high courts
as also the effectiveness of the Scheme of Arrangement between
Samruddhi and Grasim Industries Limited (“Grasim”)
in relation to the transfer of the cement business of Grasim
to Samruddhi.
On completion
of this Scheme, UltraTech is expected to emerge as the largest
cement and RMC entity in the country, and the 10th largest
in the world in cement capacity. The company will also add
the speciality products of white cement and wallcare putty
to its portfolio.
Directors
Mr. S. Misra, Managing Director, retired from the services of
the company at the close of business hours on 31 March 2010.
He has ceased to be a Director from that date.
Mr. O.
P. Puranmalka took over as Whole-time Director with effect
from 1 April 2010.
Outlook
Significant capacity addition during the year, together with
the possible addition of around 30mtpa during FY11 may lead
to a surplus scenario. Capacity utilisation is expected to be
around 80%. These factors are likely to put pressure on prices.
Although
the additional capacities will hit the market, your company
believes that progressive improvement in cement demand attributable
to government initiatives in infrastructure and housing bode
well for the industry. We expect demand to grow over 10% in
the long term.
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