1. Operational Performance
All cement plants operated at very high capacity levels resulting in higher clinker production by 58% at 2.29 million tonnes as against 1.45 million tonnes in the corresponding quarter of the previous year. Similarly production of cement was higher by 32% at 2.37 million tonnes against 1.79 million tonnes.
Cement sales were up by 28% to 2.30 million tonnes from 1.80 million tonnes in the corresponding quarter of the previous year. Domestic sales were up by 27% as compared to the corresponding quarter of the previous year and exports were up by 33%. The domestic sale was 1.91 million tonnes as against 1.50 million tonnes in the corresponding quarter of the previous year and the exports were at 0.40 million tonnes as against 0.30 million tonnes.
2. Other Income
Other Income during the quarter is higher at Rs. 79 million as compared to Rs. 50 million in the corresponding quarter of the previous year on account of better return on funds as well as increase in quantum of funds deployed due to good cash profit and no capex.
3. Costs
Higher productivity led to substantial lowering of costs. The reduction in cost was primarily due to a reduction in the fuel cost, which fell by approximately 8 per cent.
Freight cost in the quarter increased due to commissioning of the Maharashtra plant where lead distances are higher as compared to the other plants. Though the variable cost is about Rs150 per tonne lower as compared to other plants.
4. Profit (PBIDT)
Despite a drop in sales realisation by approx. 5%, the PBIDT is higher by 12% to Rs. 1356 million as against Rs. 1211 million primarily on account of better cost management. The PBIDT Margin is marginally lower at 32.3% as compared to 34.5% in the corresponding quarter of the previous year.
5. Interest
The Interest expenses during the current quarter remained almost unchanged at Rs. 261.1 million as against Rs. 261.3 million in the corresponding quarter of the previous year on account of better management of interest costs. The interest costs were contained inspite of commissioning of cement plant in Chandrapur, Maharashtra
6. Profit after Tax
After providing for tax (including deferred tax) of Rs. 91 million (in the corresponding previous quarter Rs. 108 million), the Profit After Tax is up by 12% to Rs. 565 million as compared to Rs. 504 million.
7. Comparison of Q2 FY 2003 over Q1 FY 2003
Sales Volume up by 7.7% from 2.14 million tonnes to 2.30 million tonnes.
Value up by 12.2% from Rs. 43.04 million to Rs. 48.70 million.
Operating Margin up from 24% to 32.3%.
Net Profits up 3 times from Rs. 177 million to Rs. 565 million.
8. Outlook for the current year
For the 12 months ending December 2002, the cement despatches were 109 million tonnes as against 98 million tonnes, an increase of approx. 11%. With the road construction programme now at full speed and a continued good demand for housing, it is expected that demand for cement would continue to by very good.
9. Brief financials of our subsidiary and associate
Both these companies have performed very well and have reported very good results. The Operating Profit Margins have improved very impressively to 24% for both the companies, one of the highest among cement companies in India.
Rs. in Million |
||||
ACEL |
ACRL |
|||
| IIQ2003 |
IIQ2002 |
IIQ2003 |
IIQ2002 |
|
| Sales:- |
||||
| Quantity (mln. tonnes) |
0.31 |
0.39 |
0. 34 |
0.32 |
| Value |
868 |
895 |
771 |
727 |
| PBIDT |
183 |
9 |
152 |
76 |
| Interest |
46 |
55 |
99 |
117 |
| Depreciation |
62 |
67 |
63 |
63 |
| Net Profit/(Loss) |
75 |
(54) |
(10) |
(104) |
| Net Operating Margin |
24% |
1% |
24% |
12 % |