UltraTech announces financial results for the quarter and year ended 31 March 2008

1st May, 2008

22 April 2008

UltraTech announces financial results for the quarter and year ended 31 March 2008

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UltraTech Cement Limited, an Aditya Birla Group Company today announced its financial results for the quarter and year ended 31 March 2008.

Financials –; Q4FY08
For the quarter ended 31 March 2008, the company achieved net revenues of Rs.1,602 crore (Rs.1,465 crore). After providing for interest of Rs. 19 crore (Rs. 20 crore), depreciation of Rs. 65 crore (Rs. 60 crore) and tax of Rs. 148 crore (Rs.116 crore), the profit after tax stood at Rs. 283 crore (Rs.232 crore).

The company produced 4.22 mmt of cement (4.17 mmt). Effective capacity utilisation at 113 per cent was on par with the corresponding period of the previous year.

Domestic sales volume grew by 4 per cent from 3.86 mmt to 4.03 mmt in Q4FY08, by curtailing exports to cater to the rising domestic demand.

Increase in prices of coal, fly-ash, iron ore and petro products resulted in variable costs rising sharply by 12 per cent compared to Q4FY07. Imported coal prices at US$150 pmt (US$74pmt), more than doubled during the quarter. Sequentially too, QoQ witnessed sharp increase in variable costs of over 10 per cent, while realisation remained flat, thereby resulting in continuous pressure on margins.

Financials –; FY08
For the year ended 31 March 2008 the company achieved net revenues of Rs.5,509 crore (Rs.4,911 crore). After providing for Interest of Rs.76 crore (Rs.87 crore), depreciation of Rs.237 crore (Rs.226 crore) and tax of Rs.499 crore (Rs.384 crore), the profit after tax stood at Rs.1,008 crore (Rs.782 crore).

During the year the company produced 15.07 mmt of cement (14.64 mmt). Effective capacity utilisation remained flat at 101 per cent.

Variable cost increased by over 8 per cent during FY08 mainly on account of escalation in the cost of raw materials, mounting freight charges and the cost of imported coal.

The recent ban on exports imposed by the government will have an impact on export revenues. However, the company plans to increase its domestic volume to mitigate the impact.

Dividend
The board of directors have at their meeting held today, recommended a dividend of 50 per cent, aggregating to Rs. 62.24 crore. The company will absorb the corporate tax on dividend amounting to Rs. 10.58 crore, leading to a total payout of Rs. 72.82 crore.

Capex
Clinkerisation (Pyrosection) unit at the company’s unit in Andhra Pradesh (APCW) was commissioned in Q4FY08. Remaining work pertaining to capacity expansion at APCW and the split grinding unit at Ginigera in Karnataka is in progress. The unit will be operational in H1FY09. Continuous de-bottlenecking efforts across the company’s units resulted in capacity increasing by 1.2 mmt during the year. Upon commissioning of expanded capacity at APCW, the company’s total capacity will be 23.1 mmt.

Trials have begun on the first stream of the Thermal Power Plant (TPP) of 23mw at the unit in Gujarat (GCW). All four streams aggregating to 92mw will be fully operational in H1FY09. The project work at the other TPP’s aggregating to 100mw being set up at the company’s units in Andhra Pradesh and Chattisgarh are in full swing. These will be commissioned during H1FY09.

15 ready mix concrete plants have been set up in FY08 across the country. Recognising the opportunities that this business offers, the company is focussed on setting up additional ready mix concrete plants.

Outlook
Overall, demand is expected to grow by 9 per cent. The industry will inevitably experience a surplus of supply over demand on account of additional capacity of 118 mmt, during the XIth plan period which is expected to have an impact on domestic prices in CY09. Continuous government intervention has resulted in uncertain price environment, which together with significant increase in input costs will have an adverse impact on 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