UltraTech Cement - August 2019

UltraTech Cement, an Aditya Birla Group company, almost doubled its net profit in the quarter ending 30 June 2019, on the back of merger synergies and improved operational efficiency. Consolidated net profit for the three-month period came in at INR12.08bn (US$168.4m), up 91 per cent YoY from INR6.31bn, while profit before interest, depreciation and tax advanced from INR17.6bn to INR28.4bn.

Its Nathdwara Cement company has now completed a major overhaul of its plants, which have “achieved optimal efficiencies”, according to the company. The 21.2Mta of cement acquired from Jaiprakash Associates in 2017 is also now operating in line with the existing plants and achieved a breakeven profit before tax during the quarter. Meanwhile, logistics costs fell by five per cent YoY over the quarter due to lower diesel prices, and energy and raw material costs declined by two per cent on the back of lower energy consumption.

Over the same period, consolidated net sales advanced to INR100bn, compared to INR87.2bn in the same period a year earlier, following a two per cent YoY uptick in sales to 17.86Mt. Looking ahead, the company’s Bara grinding unit is scheduled for commissioning during 3QFY20, despite some delays. UltraTech is also in the process of merging the cement interests of Century Textiles into its business. When completed, and coupled with other ongoing expansions, UltraTech will have an installed cement production capacity of just over 117Mta.