UltraTech Cement announces results for the quarter ended 31 December 2010

1st January, 2012

25 January 2011

UltraTech Cement announces results for the quarter ended 31 December 2010

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 Rs. in crore
 Quarter ended
 31 December 201031 December 2009 (LFL#)31 December 2009
Net sales3,7153,6821,652
PBIT7681,019414
Profit after tax (PAT)319499196

# LFL = like for like

UltraTech Cement Limited, an Aditya Birla Group company, today announced its unaudited financial results for the quarter ended 31 December 2010. The results for the corresponding quarter of FY10 have been re-cast to include Samruddhi Cement Limited’s performance for a like-for-like comparison. In that sense this quarter's numbers are strictly not comparable with the corresponding period of the previous year.

Financials
Net sales stood at ` 3,715 crores as compared to ` 3,682 crores in the corresponding period of the previous year. Profit before interest, depreciation and tax is ` 768 crores vis-a-vis ` 1,019 crores. Profit after tax is ` 319 crores vis-a-vis ` 499 crores in the corresponding period of the previous year and ` 116 crores in Q2FY11.

The company produced 9.30MMT (8.99 MMT) of grey cement. The combined domestic cement and clinker sales of grey cement was 9.16 MMT (9.05 MMT).

White Cement –; During the quarter, the company produced 1.47 LMT (1.38 LMT) of white cement. It sold 1.44 LMT (1.30 LMT) white cement and 0.81 LMT (0.60 LMT) wall care putty.

During Q3FY11, industry demand growth was significantly lower than the expected growth of over eight per cent. This was mainly on account of the prolonged monsoon, non-availability of resources, lower realty and infrastructure spending and de-growth in the markets of south India where the company has a significant presence.

During the nine-month period ended 31 December, 2010, the industry witnessed a capacity addition of around 14 MMT over and above the capacity addition of more than 60 MMT in FY10. These factors have resulted in the industry capacity utilisation remaining at 75 per cent.

On the cost front, there was continuous pressure with prices of imported coal rising from US$ 92/Mt in Q3FY10 to US$ 125/Mt, an increase of around 36 per cent.

Collectively, these aspects have affected the company’s performance. While domestic cement volume rose by one per cent YoY and by four per cent sequentially, realisation was lower by three per cent as compared to Q3FY10 though on a sequential basis it improved by around 12 per cent. Despite improved realisation compared to Q2FY11, margins remained under pressure.

Capex
The company has a capital outlay of around ` 10,000 crores to be spent over the next three years. These include setting up of additional clinkerisation plants at Chhattisgarh and Karnataka along with grinding units and bulk packaging terminals across various states. To take these projects forward, orders for major equipment have been placed. Consequent to these expansions, the total cement capacity addition will be 9.2 mtpa, which will be operational from early FY14

Outlook
Cement demand is expected to grow around eight per cent to 10 per cent from FY12 on the back of the government’s initiatives to boost rural development, infrastructure and housing. These aspects augur well for the company. The pricing environment is likely to remain challenging coupled with rising energy costs due to greater reliance on imports, which will continue to squeeze margins.

For more information, contact:
Dr. Pragnya Ram
Group Executive President
Corporate Communications & CSR
Aditya Birla Management Corporation Private Limited
Tel: 91-22-6652 5000 / 2499 5000
Fax: 91-22-6652 5741/ 42
Email: pragnya.ram@adityabirla.com