UltraTech June qtr net dips 14% to Rs 673 cr
Mumbai: Cement maker UltraTech Cement Monday reported a 13.6 percent drop in standalone net profit in the first quarter ended June 30 at Rs 672.60 crore due to a decline in sales as well as lower price realisation.
The Aditya Birla Group firm had reported Rs 778.39 crore net profit during the April-June quarter last fiscal.
Net sales declined marginally to Rs 4,957.54 crore in the April-June period from Rs 5,071.9 crore a year ago.
"The performance of the company has been impacted by the prevailing economic environment characterised by rising inflation, high interest rates and soaring input costs," UltraTech Chairman Kumar Managalam Birla told shareholders during the 16th Annual General Meeting here.
Sales volume declined during the quarter under review mainly due to weak demand from the infrastructure segment as well as drop in Government spending, Chief Financial Officer K C Birla told reporters on the sidelines of AGM.
The firm sold 9.88 million tonne cement and clinker during the quarter compared to 9.94 million tonne a year ago.
"Demand for cement declined 5.8 percent during the April-May period. However, it improved by 1 percent in June. This was primarily due to slowdown in the infrastructure sector as well as Government spending. At the same time, the Q1 realisation was down 6 percent, impacting overall performance.
"But we expect the demand to increase by 3-4 percent during the July-September quarter," K C Birla said.
He said the quarter witnessed an increasing trend in logistics and raw material cost, linked to increase in Railway freight and diesel prices.
"However, we have managed to reduce our power and fuel cost by nearly 10 percent mainly on the back of reduction in imported coal prices as well as the fuel mix that we use at our captive power plants," the CFO said.
The cement firm's total expenditure went up to Rs 4,161 crore from Rs 4,010 crore in the year-ago period. Power and fuel cost, on the contrary, reduced to Rs 989.6 crore from Rs 1,086.17 crore in the year-ago period.
Asked about the company's capex plans for FY14, K C Birla said, "The company has a total capex outlay of Rs 11,400 crore for our ongoing projects. Of this, over Rs 4,300 crore has been already spent.
"Today the Board further sanctioned capex of Rs 2,100 crore towards modernisation and setting up of grinding units and ready mix concrete plants across the country. With this, the total capex under implementation is around Rs 13,700 crore."
The company is in the process of ramping up capacity by another 10 million tonnes by 2015, Birla said, adding, "this will result in total cement capacity getting augmented to 64.45 million tonnes."
The CFO further said the demand growth for cement is likely to be around 6 cent in FY14, though over the long run it is expected to be over 8 percent.
"We expect the second half of the fiscal to be better in terms of demand growth as we may see some increase in pre- election Government spending. This will trigger growth in the overall sector," he added.
Shares of the company inched up by 0.80 percent to Rs 1,880.00 apiece on the BSE.