|
PRESS
RELEASE
23 October 2008
Grasim
announces results for Q2 FY2009
Click
here to view the results
- Consolidated
net profit at Rs. 486 crore
- Consolidated
net revenue at Rs. 4,489 crore
Consolidated
financial performance
|
Rs.
crore
|
|
Q2
FY09
|
Q2
FY08
|
H1
FY09
|
H1
FY08
|
| Net
revenue |
4,489
|
3,964
|
8,944
|
8,026
|
| Profit
before taxes |
737
|
1,050
|
1,827
|
2,205
|
| Profit
after taxes |
563
|
705
|
1,354
|
1,504
|
| Minority share |
(77)
|
(85)
|
(196)
|
(214)
|
| Net
profit |
486
|
620
|
1,158
|
1,290
|
| EPS (Rs.) |
53
|
68
|
126
|
141
|
Grasim, an Aditya Birla Group company, today announced its results
for the second quarter ended 30 September 2008. Its consolidated
revenues stood at Rs. 4,489 crore (Rs. 3,964 crore). Net profit
was lower at Rs. 486 crore (Rs. 620 crore). Viewed in the backdrop
of the general slowdown in the economy and rising input costs,
which has affected all industries in general and the sectors
that Grasim operates in, in particular, the performance has
been satisfactory.
Standalone
financial performance
|
Rs.
crore
|
|
Q2
FY09
|
Q2
FY08
|
H1
FY09
|
H1
FY08
|
| Net
revenue |
2,701
|
2,508
|
5,317
|
4,946
|
| Profit
before taxes |
543
|
748
|
1,242
|
1,494
|
| Net
profit |
419
|
500
|
934
|
1,011
|
| EPS (Rs.) |
46
|
55
|
102
|
110
|
On a standalone basis, Grasim’s revenues were at Rs. 2,701
crore (Rs. 2,508 crore). Net profit was lower at Rs. 419 crore
(Rs. 500 crore).
Highlights of Grasim’s operations
|
|
Q2
FY09
|
Q2
FY08
|
Change
(per cent)
|
| Production |
| Viscose
staple fibre |
M.T. |
62,973
|
69,678
|
-10
|
| Cement |
Mn.
M.T. |
3.65
|
3.62
|
1
|
| White
cement |
M.T. |
102,322
|
89,733
|
14
|
| Sponge
iron |
M.T. |
112,186
|
146,673
|
-24
|
| Caustic
soda |
M.T. |
55,137
|
48,752
|
13
|
| Sales
volumes |
| Viscose
staple fibre |
M.T. |
62,536
|
70,183
|
-11
|
| Cement |
Mn.
M.T. |
3.70
|
3.60
|
3
|
| White
cement |
M.T. |
106,597
|
92,566
|
15
|
| Sponge
iron |
M.T. |
117,972
|
141,960
|
-17
|
| Caustic
soda |
M.T. |
53,103
|
49,634
|
7
|
Viscose
staple fibre (VSF) business
The
performance of VSF business was impacted due to the sluggish
demand, given the global slowdown and liquidation of inventory
in the value chain. The textile sector has been adversely
affected due to the rising inflation and a shift in consumer
preferences. In line with market realities, the company has
scaled down its production. An unprecedented increase in the
price of sulphur and high pulp and caustic soda prices, coupled
with the weakening of the Indian rupee, led to a drop in operating
profits and margins.
Demand
is expected to remain subdued in the short to medium term
until the global economic situation improves. Margins are
expected to remain range bound due to lower volumes and high
input costs. While the prices of pulp and sulphur have started
declining, the positive impact thereof is partially offset
by the weakening rupee.
The conversion
of AV Nackawic plant from paper grade pulp to rayon grade
pulp was completed during the quarter.
The long-term
outlook for the VSF business is positive.
Chemical
plant
The chemical plant posted good performance. Higher demand from
end user industries saw caustic soda volumes improving by 7
per cent. ECU realisations were up by 18 per cent, driven by
strong caustic prices. Margins were maintained despite the steep
increase in the cost of key inputs and power. ECU realisations
are expected to be under pressure, mainly due to the downward
trend in the prices of chlorine and HCL.
Cement
business
In the cement business, sales volumes registered an increase
of 3 per cent, while production was marginally higher. The RMC
business recorded an impressive growth aided by the network
expansion. The sharp escalation in prices of coal and raw materials
and higher freight costs impacted margins adversely.
Cement
subsidiary
The
performance of UltraTech Cement Limited, a subsidiary of Grasim,
was subdued. The sharp increase in prices of coal and raw materials
resulted in variable costs rising by 37 per cent. The combined
sales of cement and clinker reflected a growth of 13 per cent.
Net profit was lower by 9 per cent at Rs. 167 crore.
Cement
capex plan
The
company’s expansions at Shambhupura and Kotputli in Rajasthan
are progressing satisfactorily. At Shambhupura, the production
of clinker has commenced. The grinding unit at Dadri also became
operational. The grinding unit at Shambhupura and the greenfield
plant at Kotputli are expected to be operational in Q4 FY09.
The slowdown
being witnessed by the real estate and infrastructure sectors
has resulted in slackening of demand for cement. The price of
cement may come under pressure from CY 2009 owing to the bunching
of capacity expansions expected in FY10 and FY11. While the
price of imported coal has registered a fall of late, the expected
benefit in energy cost will be partially offset by the falling
value of the rupee. Going forward, Grasim’s new capacities
shall ease its capacity constraint, lead to volume growth and
improvement in operating profit.
Outlook
The company’s thrust will be on fortifying its leadership
position in the VSF and cement sectors. Cost optimisation and
maximisation of asset productivity will continue to the company’s
hallmarks. The prospects for the company remain positive. |
