New Delhi, May 05, 2016: Orient Cement Limited, a part of the USD 1.6 billion diversified CK Birla Group, announced its financial results for the quarter and year ended March 31, 2016. The company has reported volume growth 40% over the corresponding quarter last year on account of increasing volumes from both old operations and the newly commissioned plant at Chittapur in Gulbarga district, Karnataka. For the full financial year, the company has posted an 8.3% increase in sales volumes.
Financials – Q4FY16
- Net sales at Rs. 447.3 crores as compared to Rs. 387.4 crores in the corresponding period of the previous year
- EBITDA is Rs. 64.7 crores (versus Rs. 102.8 crores in Q4FY15)and net profit (PAT) is Rs. 19.4 crores (versus Rs. 85.5 crores in Q4FY15), impacted by the finance costs and depreciation that is now booked on the new Greenfield plant in Karnataka
Financials – FY16
- Net sales at Rs. 1501.8 crores compared to Rs. 1535.3 crores in the previous year despite higher volumes
- EBITDA is Rs. 190.9 crores (versus Rs. 312.8 crores in FY15) and net profit (PAT) is Rs. 62.2 crores (versus Rs. 194.8 crores in FY15)
The new capacity has made good progress in terms of stabilization over the last two quarters and is giving the company access to new markets in Karnataka besides strengthening its position in Telangana, Andhra Pradesh and Maharashtra. As the new capacity stabilizes, it is expected to contribute to the company’s rapid growth and market reach in the quarters ahead.
Deepak Khetrapal, Managing Director and Chief Executive Officer, Orient Cementsaid, The quarter ended March 31 has seen a good recovery in volumes across our core areas, especially AP and Telangana, which is reflected in our utilization levels this quarter. The old operations achieved a capacity utilization of 86% in Q4FY16 while the new plant at Chittapur is now generating a positive EBITDA.
However the low price environment in our core markets continues to persist, with prices dropping lower in AP/Telangana in the recent few weeks. On average, cement net sale realisationshave been 3% lower than the last quarter and more than 15% lower than the same period last year.
Amidst these difficult external developments, we continue to focus on our operating efficiencies and costs in our existing operations continue to get better, a result of our “best in class” operating practices.Thecosts related to the commissioning/stabilization of our new integrated unit at Chittapurhave affected our operating and net profit numbers in the last two quarters.However, we are already seeing some mitigation from the positive impact of higher volumes from this unit and expect higher volumes and increased operating efficiencies to compensate further in the quarters ahead.
The Company expects demand to pick up in a few quarters on the back of housing and construction activity, especially so if predictions of a favourable monsoon season are met. Various government projects for low cost housing, roads, irrigation, metros as well as new initiatives like “Smart Cities” & “Swachh Bharat” are still expected to result in improved demand for cement in Telangana, AP and Maharashtra. The construction of the new capital of AP at Amravathi is also expected to contribute to higher cement appetite in Southern India.
Corporate Comm India(CCI Newswire)