UltraTech Announces Financial Results for the Quarter and Year ended 31st March, 2008

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

Financials - Q4FY08

For the quarter ended 31st March, 2008 the Company achieved Net Revenues of Rs.1,602 crores (Rs.1,465 crores). After providing for Interest of Rs. 19 crores (Rs. 20 crores), Depreciation of Rs. 65 crores (Rs. 60 crores) and Tax of Rs. 148 crores (Rs.116 crores), the Profit After Tax stood at Rs. 283 crores (Rs.232 crores).

The Company produced 4.22 MMT of cement (4.17 MMT). Effective capacity utilisation at 113% was on par with the corresponding period of the previous year.

Domestic sales volume grew by 4% 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% 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%, while realisation remained flat, thereby resulting in continuous pressure on margins.

Financials - FY08

For the year ended 31st March, 2008 the Company achieved Net Revenues of Rs.5,509 crores (Rs.4,911 crores). After providing for Interest of Rs.76 crores (Rs.87 crores), Depreciation of Rs.237 crores (Rs.226 crores) and Tax of Rs.499 crores (Rs.384 crores), the Profit After Tax stood at Rs.1,008 crores (Rs.782 crores).

During the year the Company produced 15.07 MMT of cement (14.64 MMT). Effective capacity utilisation remained flat at 101%.

Variable cost increased by over 8 % 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%, aggregating to Rs. 62.24 crores. The Company will absorb the corporate tax on dividend amounting to Rs. 10.58 crores, leading to a total payout of Rs. 72.82 crores.

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 1st 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 100MWs 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%. 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.