UltraTech posts good Q1 performance

• Consolidates its national leadership position with 34 per cent jump in volumes
• Operating EBITDA: Rs.929 per ton
• Jaypee acquisition fully integrated
• Net profit affected due to depreciation: Rs.486 crore and Interest Costs: Rs.336 crore
• Input costs also up

UltraTech Cement Limited, today announced its unaudited financial results for the quarter ended 30 June 2018.

Financials
Net sales have soared 27 per cent to Rs.8,841 crore from Rs.6,938 crore over previous year. Profit before Interest, Depreciation and Tax was Rs.1,763 crore vis-à-vis Rs.1,798 crore in the corresponding period of the previous year.

On a standalone basis, net sales stood at Rs.8,476 crore (Rs.6,533 crore). Profit before Interest, Depreciation and Tax was Rs.1,697 crore (Rs. 1,725 crore).

Sales volume jumped 34 per cent over Q1FY18. Notwithstanding the hike in fuel prices, the company achieved an operating EBITDA of Rs.929/t as compared to Rs.922/t in Q4FY18.

Corporate Development
The company’s acquisition of 21.2 mtpa cement capacity in June 2017 has already achieved an average capacity utilisation of 70 per cent across all the regions and a cash break even. This has been one of the fastest ramp ups of an acquired capacity.

During the quarter, the Board of Directors approved a Scheme of Arrangement amongst Century Textiles and Industries Limited (Century), the company and their respective shareholders and creditors (the Scheme). In terms of the Scheme, Century will demerge its cement business into the company. Century’s cement business consists of three integrated cement units in Madhya Pradesh, Chhattisgarh and Maharashtra and a grinding unit in West Bengal. In terms of the Scheme, the company will issue 1 (one) equity share of face value Rs. 10/- each for every 8 (eight) equity shares of Century of face value Rs.10/- each to the shareholders of Century. The transaction is subject to the requisite regulatory approvals.

The company has commissioned the second cement mill of 1.75 mtpa capacity at Manavar District - Dhar, Madhya Pradesh in June 2018. This project went on stream in a record time of less than a year which is a world record in project execution and at a cost of less than $90/mt. The plant has already stabilised and is operating at a capacity utilisation of 60 per cent.

Work on the company’s 4 mtpa grinding unit at Bara in Uttar Pradesh is progressing well and shall be commissioned by March 2019. This vaults UltraTech to the 3rd largest cement company globally (excluding China) and the largest player in India.

Upon completing the acquisition of Century’s cement business and with the on-going capacity expansions, the company's cement manufacturing capacity will stand augmented to 111.1 mtpa, including its overseas capacity.

Outlook
With the cement industry now in its up-cycle, demand is expected to be healthy. The key drivers being higher government budget allocation for infrastructure and rural development, increased rural housing demand consequent to increase in minimum support price for kharif crop and pre-election spending. With the additional capacities acquired by the company through the organic and inorganic route and its rapid ramp-up, UltraTech is very well placed to participate in the growth of the economy.