UltraTech Cement posts profit in Q2

ULTRATECH Cement India has reported a net profit of Rs 8 lakh for the second quarter ended September 30. The company had reported a net loss of Rs 2.29 crore during the corresponding year-ago period. The results for the quarter under consideration were adversely affected by floods in Maharashtra and Gujarat, which account for 50 per cent of Ultratech’s domestic sales; they were also affected by annual maintenance work at the company’s production lines, and by escalation in energy prices, said a release from the company. Net sales for the quarter were up 11 per cent, and amounted to Rs 635 crore (Rs 571 crore). Sales volumes at 30.9 lakh tonnes were down by eight per cent year-on-year.

UltraTech, which has the capacity to make over 17Mt of cement, said clinker production at its Kovayya unit in Gujarat was stopped for seven days due to heavy rains. The unit accounts for a significant proportion of UltraTech’s total production.  This led to lower capacity utilisation of 69 per cent, compared with 95 per cent in the corresponding period last year, UltraTech said, adding that sales volume fell eight per cent on year at 3.09Mt Annual maintenance expenses at its plants across the country and higher fuel bills led UltraTech’s total expenditure to surge 19 per cent.

"We are taking steps to reduce our fuel bills. We plan to set up a 92MW power plant that will meet the requirements of our Kovayya and Narmada units," said Mr Rathi. The plant is estimated to cost about Rs 580 crore. Mr Rathi said while cement prices grew five per cent on year due to increase in demand, they are expected to rise further "as post monsoon, construction activity builds up."