UltraTech Cement Ltd shares Q3 financial results
Published by Emily Thomas,
With the omicron variant of COVID-19 spreading rapidly, its impact on the economy remains to be seen.
With business continuity plans in place, UltraTech is better placed to tide over the current wave of the pandemic. As in the earlier waves, it continues to closely monitor the situation and impact on its operations. Safety and well-being of employees and business partners remain the topmost priority. It is also putting in place a booster-vaccination programme for employees’ dependants who are over 60 years of age.
Consolidated Net Sales were Rs.12 710 crores vis-à-vis Rs.12 144 crores over the corresponding period of the previous year. Profit after tax jumped 8% to Rs.1708 crores from Rs.1584 crores. There is a one-time gain of Rs. 535 crores in tax for earlier years.
After gaining pace in October 2021, demand slowed down substantially in November 2021 as a result of the construction ban in the NCR, extended monsoons in the South and a few states in the North, sand issues in the Eastern region as well as in parts of Uttar Pradesh, and the Diwali holiday season. The company records a 13.2% growth in its domestic cement sales volumes in the nine months ended December 2021, despite a marginal degrowth in the reported quarter. On the cost front, pet coke and international coal prices have started softening during this quarter, though the prevailing rates are still at elevated levels YoY. Diesel prices are up 24% YoY, despite the recent reduction in duty/other levies by the Central/State Governments.
During the quarter the company repaid loans amounting to Rs 3459 crores. The repayments were funded through internal accruals and have reduced the company’s exposure to floating interest rate.
The company has commissioned 19 MW of WHRS and 53 MW of solar power. With this expansion the company’s green energy share has gone up to 16% which includes 156 MW of WHRS and 221 MW of solar power.
The Board at a recent meeting approved CAPEX of Rs. 965 crores towards modernisation and expansion of capacity at Birla White from the current 6.5 LTPA to 12.53 LTPA, in a phased manner. The incremental capacity will be operational in a phased manner. The capacity expansion will help Birla White strengthen its presence in the growing white cement market, reducing its dependence on high-cost imports.
UltraTech commenced operations from its bulk terminal at Kalamboli, Navi Mumbai. This is the 7th bulk terminal of the company. The earlier six are located at Cochin in Kerala; Mangalore and Doddaballapur in Karnataka; Uran and Pune in Maharashtra and Shankarpalli in Telangana. With a capacity to handle ~1.2 mtpa cement and considering the large infrastructure development projects in and around Mumbai, the bulk terminal will strengthen the company to further increase its sales of bulk cement. Cement will be brought in bulk rakes to this terminal from its various manufacturing units. This will effectively help in reducing freight cost, with increase in the usage of rail transportation. This is another step in reducing carbon emissions and driving sustainable growth.
The company commissioned Line II of the Bara Grinding Unit in Uttar Pradesh, having cement capacity of 2 mtpa. Line I was earlier commissioned in January 2020 and is already operating at a capacity utilisation of more than 80%. This additional capacity will help UltraTech to service the fast-growing cement demand in the central region of India.
With this expansion, during the financial year 2021 – 22, the company has commissioned 3.2 mtpa new cement capacity, as planned, taking its total cement manufacturing capacity in India to 114.55 mtpa.
UltraTech is committed to driving sustainability across the value chain of its operations. The focus areas are decarbonisation, circular economy, biodiversity management, water positivity, safe operations, and community development. The circularity of materials is a priority for the company in tackling the issue of overutilisation of natural resources and disposal of waste generated from its use.
In recognition of its efforts to accelerate its business towards a circular model, UltraTech won the Federation of Indian Chambers of Commerce and Industry’s (FICCI) Indian Circular Economy Award (ICEA) 2021. The award recognises UltraTech’s efforts to accelerate its business towards a circular model and identifies the company as innovative and impactful in its practices.
15 of UltraTech’s limestone mines have been awarded a five-star rating for sustainable mine management, by the Ministry of Mines and Indian Bureau of Mines. This was awarded for last three years (2017-18, 2018-19 and 2019-20). With a total of 30 such 5 Star rating awards, this is the highest number of five-star ratings awarded to any company in India for all major minerals such as bauxite, copper, iron ore, manganese, lead & zinc and limestone. The Star ratings are based on adoption of best practices for exhaustive and universal implementation of Sustainable Development Framework in mining.
UltraTech has been presented the ‘Leaders Award - Mega Large Business, Process Sector’ by Frost & Sullivan and the Energy and Resources Institute (TERI) for the year 2021. The award is in recognition of the company’s efforts to build a sustainable business. This award recognises the Sustainability Excellence on ‘People, Purpose, Partnership, and Planet’ pillars, along with Sustainability Analytics and the Renewable Energy Consumption initiatives of organisations in India.
During the quarter, trade sales were impacted more than non-trade sales, as overall cement demand remained subdued. With the onset of the peak season and rising construction activities, cement demand is expected to revive in Q4FY22, driven by a pick-up in the government-led infrastructure and housing projects. Rural and urban demand is also expected to pick up going forward.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/17012022/ultratech-cement-ltd-shares-q3-financial-results/
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