UltraTech's 2Q18 sales rise by 27%

UltraTech Cement Ltd's unaudited financial results for the quarter ended 30 June 2018 reported net sales of INR88.4bn (US$1.28bn), up 27 per cent from INR69.3bn of the previous year. Profit before interest, depreciation and tax (EBITDA) was INR17630m when compared with INR17980m in the corresponding period of the previous year.

Sales volume jumped 34 per cent over 1QFY18. The company achieved an operating EBITDA of INR929/t as compared to INR922/t in 4QFY18, despite the hike in fuel prices.

Corporate development
Following the company's acquisition of 21.2Mta cement capacity in June 2017, the additional capacity has not only already achieved a cash break-even but also an average capacity utilisation across all regions. “This has been one of the fastest ramp ups of an acquired capacity,” said the company in a statement.

Century's cement business consists of three integrated cement units in Madhya Pradesh, Chhattisgarh and Maharashtra and a grinding unit in West Bengal.

In addition, the company has commissioned the second, 1.75Mta cement mill at Manavar District, Dhar, Madhya Pradesh, in June 2018. This project went on-stream in a record time of less than a year and at a cost of less than US$90/t. Following a period of stabilisation, the plant is now operating at a capacity utilisation of 60 per cent.

Work on the company's 4Mta grinding unit at Bara in Uttar Pradesh is also progressing well with commissioning expected by March 2019. This will make UltraTech not only the largest cement producer in India but also one of the world’s largest cement companies, following CNBM, Anhui Conch, LafargeHolcim and HeidelbergCement.

Upon completing the acquisition of Century's cement business and with the ongoing capacity expansions, the Company's cement manufacturing capacity (including its overseas capacity) will rise to 111.1Mta.

Outlook
Going forward, India’s cement demand is expected to be healthy, mainly driven by a higher government budget allocation for infrastructure and rural development, increased rural housing demand resulting from an increase in the minimum support price for kharif crops, and pre-election spending. Following the acquisition and rapid ramp-up of additional capacity, UltraTech is well placed to participate in the growth of the economy.