The overall performance of cement companies show a mixed results in the quarter ended December 2014. While major players like ACC and Dalmia showed reasonable growth, smaller players experienced a dip, owing to mainly sharp increase in power and fuel costs and logistics cost. However, these costs are expected to recede in the coming quarters to offset the current dip in performance.
Research reports indicate that the Indian cement industry to grow at a CAGR of 8.96 per cent in 2014-19. The industry is currently trying to achieve global standards in production, safety and energy-efficiency. Major companies are in the middle of expansion mode while they have reasonably well performed in the quarter ended December 2014.
ACC net sales up 5.4 per cent in 2014
ACC has announced its financial results for the financial year ended on December 31, 2014. Total consolidated net sales for 2014 was Rs 11,480.31 crore compared to Rs 10,889.08 crore in 2013, registering growth of 5.4 per cent Profit after tax for 2014 was Rs 1,161.82 crore (including tax write back of Rs 309.23 crore) compared to Rs 1,094.67 crore in 2013 (including tax write back of Rs 216.74 crore).
The clinkering project for 2.79 million tonne per annum at Jamul and the grinding unit for 1.35 million tonne per annum at Sindhri are expected to be completed in 2015, according to a company release.
Dalmia Bharat quarterly results
The acquisition of Dalmia Cement East Ltd (formerly Bokaro Jaypee Cement Ltd) was consummated during the quarter with 100 per cent stake in the company, now wholly owned subsidiary of Dalmia Cement (Bharat) Ltd. The total enterprise value for the same is Rs 1,150 crore. The quarterly results under review include financials of Dalmia Cement East Ltd w.e.f. November 16, 2014 Total Income from operations was Rs 794 crore for the quarter as against Rs 707 crore for the corresponding period of previous year, led by increase in volumes (+6 per cent) and sales realisations (+9 per cent).
EBITDA for the quarter was flat at Rs 125 crore. Power and fuel cost on per tonne basis was lower by 16 per cent on YoY basis but the same has been offset by higher freight cost and slightly increase in raw material cost for North East operations. PAT for the quarter was positive at Rs 10 lakh as against loss of Rs 12 crore in the corresponding quarter of the previous year.
Southern operations: Variable costs on per tonne basis were lower by 4 per cent on YoY basis for the quarter on account of further enhancement in efficiencies. Power consumption per tonne of cement produced has improved to 69.5 kwh as against 71.3 kwh and fuel cost on calorific value basis has witnessed a reduction of 16 per cent. Freight costs were higher during the quarter but is expected to recede in coming quarters on account of drop in crude prices.
North-East operations: North East operations witnessed stabilization of operations during the quarter. Volumes were up 22 per cent on QoQ basis and EBITDA improved significantly on YoY and QoQ basis. Jayesh Doshi, Executive Director - Finance & Strategy, Dalmia Bharat, said, ´The macro economic factors are improving and expected to improve further. With higher GDP growth, impetus on ´Make in India´ strategy and further rate cuts expected, industrial production expected to improve, resulting in improved cement demand. Improved demand and rationalisation of capacity additions, would also lead to improved capacity utilisations.´
Shree Cement Q2 profit slips 19%
Shree Cement matched street expectations with the second quarter net profit falling 18.9 per cent year-on-year to Rs 93.7 crore. Profit was impacted by higher costs of depreciation, freight and power and fuel but was supported by higher other income, revenue and tax gain. Total income of the company grew 17.2 per cent to Rs 1,544.5 crore during October-December quarter from Rs 1,318 crore in same quarter last year. The company follows July-June as its financial year. Operating profit increased 12.9 per cent year-on-year to Rs 306 crore but margin declined 70 basis points to 19.8 per cent in the quarter gone by.
Kalyanpur Cements income dips
Kalyanpur Cements has reported a standalone total income from operations of Rs 40.12 crore and a net loss of Rs 12.62 crore for the quarter ended December 2014. Other income for the quarter was Rs 0.09 crore. For the quarter ended December 2013 the standalone total income from operations was Rs 50.99 crore and net loss was Rs 10.94 crore, and other income Rs 0.07 crore.