UltraTech Cement Q2 profit slumps 28% to Rs431 crore
New Delhi: UltraTech Cement Ltd on Wednesday reported a 28.3% drop in standalone net profit to Rs431.2 crore in the quarter ended September from a year earlier, hurt by higher interest outgo and fuel and freight expenses.
The firm said power and fuel expense was up 26% from the year ago period to Rs925/tonne, due to higher pet coke and coal prices, while freight and forwarding expense rose 5% to Rs1,089/tonne due to increase in diesel price.
Revenue rose 6.1% from the year-ago period to Rs6,571.3 crore. However, the company’s top and bottom line both beat Bloomberg consensus estimates of 23 analysts that pegged revenue at Rs6,406.3 crore and profit at Rs376.5 crore.
UltraTech’s September quarter results may not be strictly comparable to the year-ago period, as the company completed the acquisition of Jaiprakash Associates Ltd’s 21.2 million tonnes per annum (mtpa) cement capacity in the first quarter of financial year 2017-18.
“This acquisition will enhance the company’s footprint into high growth markets of India viz., central India, Himachal Pradesh, eastern Uttar Pradesh and coastal Andhra Pradesh, where the company has been focusing to increase its presence,” UltraTech said in a statement.
UltraTech said sales volume jumped 18% during the quarter from the year-ago period to 13.14 million tonnes, which included 0.73 million tonnes of exports.
The half-yearly balance sheet reveals that the acquisition has led to a jump of over Rs10,000 crore in UltraTech’s long-term borrowings since March to Rs14,201.9 crore, while short-term borrowings have more than doubled to Rs2,476.6 crore.
UltraTech raised Rs13,000 crore in rupee term loans at an interest rate slightly below 8% to fund the acquisition, Atul Daga, chief financial officer and whole-time director at the cement maker, said in July.
“This being the first quarter of operations post-acquisition, the company has injected the much needed working capital. The most critical aspect has been to improve and stabilize the quality of cement being manufactured at these plants and bringing it up to the company’s standard. Towards this, initial one-time expenses were undertaken for improving efficiencies and plant maintenance,” UltraTech added.
The company also said it has now graduated all output from acquired assets to the UltraTech brand and that there has been a month-on-month decline in operational cost and an increase in capacity utilization.
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