Financial Results: Q2FY22;Thrust on Renewable Energy

                                                                                                                                   (Rs. in crores)

        * After minority interest

18th October, 2021 : UltraTech Cement Limited, an Aditya Birla Group company today announced its financial results for the quarter ended 30th September, 2021.

COVID-19

The unexpectedly virulent second wave of COVID-19, looks to be receding almost as quickly as it was rising. Nevertheless, UltraTech continues to closely monitor the situation and the impact on its operations, while according utmost primacy to the safety and well-being of its employees and business partners.

FINANCIALS

Consolidated Net Sales was Rs.11,743 crores vis-à-vis Rs. 10,264 crores over the corresponding period of the previous year. Profit before interest, depreciation and tax was Rs. 2,855 crores compared to Rs.  2,833 crores. Profit before tax was Rs. 1,947 crores and Profit after tax was   Rs. 1,314 crores compared to Rs. 1,733 crores and Rs. 1,309 crores, respectively.

OPERATIONS

Coal and Pet coke prices nearly doubled in Q2FY22 resulting in energy cost rising 17% YoY. The resulting impact on the Company’s operations were partly offset by reduction in power consumption and continuing focus on operational efficiencies. The Company expects to commence mining operations at its Bicharpur coal block situated in Madhya Pradesh, during                Q3FY22 which will help in reducing the dependence on coal purchases.

During the quarter the Company has commissioned 12MW of WHRS and 21MW of solar power. With this expansion the Company’s green energy share has gone up to 15%.

CAPEX

UltraTech commissioned cement capacity of 1.2 mtpa in October 2021 at the following locations, which is the 1st phase of the 19.5 mtpa capacity expansion announced in December, 2020:

-  Patliputra Cement Works, Bihar – Additional cement capacity of 0.6 mtpa has been commissioned, taking the Unit’s capacity to 2.5 mtpa.

-  Dankuni Cement Works, West Bengal – Additional cement capacity of 0.6 mtpa has been commissioned, taking the Unit’s capacity to 2.2 mtpa.

This additional capacity will help UltraTech to service the fast-growing cement demand in the Eastern markets.

UltraTech’s total cement manufacturing capacity in India has now increased to 112.55 mtpa.

SUSTAINABILITY

UltraTech announced its commitment to Climate Group’s RE100 initiative at Climate Week NYC 2021. As part of this commitment, UltraTech targets to meet 100 per cent of its electricity requirement through renewable sources by 2050. RE100, led by Climate Group in partnership with CDP, brings together the world’s most influential businesses committed to 100 per cent renewable electricity.

In the last two years, UltraTech has scaled up its contracted renewable energy capacity by 2.5 times. It has already set a target to scale up its green energy mix to 34 per cent of its total power requirement by 2024, from the current levels of 13 per cent. The commitment to move to 100 per cent renewable energy to meet its electrical energy requirements by 2050 is both a reflection of its confidence on the progress made, as well as its resolve to overcome the challenges ahead. The RE100 announcement is in line with UltraTech’s focus to institutionalise its carbon reduction initiatives through measurable targets and commitments.

OUTLOOK

Recovery in rural housing, higher MSP (minimum support price) for kharif crop; improved food grain production in rabi harvest; a third consecutive normal monsoon and pick-up in infrastructure-led construction activity are likely to drive cement demand off-take. Continuous increases in input costs like coal, pet coke and diesel pose a challenge for the industry.

UltraTech is confident of weathering the storm of increase in prices of coal, diesel and other inputs, with its sustainable efficiency improvement programs, accompanied by increase in selling prices to absorb the increase in costs.