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PRESS
RELEASE
31
January 2009
Grasim
announces positive performance for Q3 FY2009
Click
here to view the results
|
Rs.
crore
|
| Consolidated
net revenue |
4,632
|
| Consolidated
net profit |
460
|
Consolidated
financial performance
|
|
Q3
FY09
|
Q3
FY08
|
9
months
FY09
|
9
months
FY08
|
| Net
revenue |
4,632
|
4,350
|
13,578
|
12,376
|
| Profit
before taxes |
749
|
1,253
|
2,576
|
3,458
|
| Profit
after taxes |
565
|
854
|
1,920
|
2,358
|
| Minority
share |
106
|
131
|
303
|
345
|
| Net
profit |
460
|
721
|
1,618
|
2,011
|
| EPS
(Rs.) |
50
|
79
|
176
|
219
|
| Cash profit |
880
|
1,061
|
2,824
|
2,948
|
Grasim, an Aditya Birla Group Company, today announced its results
for the third quarter ended 31 December, 2008. Its consolidated
revenues were higher by 6 per cent at Rs. 4,632 crore (Rs. 4,350
crore). Net profit was lower at Rs. 460 crore (Rs. 721 crore)
due to the weak performance by its viscose staple fibre (VSF)
business and higher input and energy costs. The performance
is to be viewed in the backdrop of the unprecedented global
economic downturn which has adversely impacted company’s
key businesses.
During
the nine months ended 31 December, 2008, Grasim’s consolidated
revenues rose by 10 per cent at Rs. 13,578 crore (Rs. 12,376
crore). Net profit for the period was Rs. 1,618 crore (Rs.
2,011 crore). The company earned a cash profit of Rs. 2,824
crore, vis-à-vis Rs. 2,948 crore in the corresponding
period. Given the current economic environment and its impact
on company’s key businesses, the overall performance
is considered satisfactory.
Stand-alone
financial performance
|
|
Q3
FY09
|
Q3
FY08
|
9
months
FY09
|
9
months
FY08
|
| Net
revenue |
2,690
|
2,615
|
8,009
|
7,561
|
| Profit
before taxes |
416
|
815
|
1,658
|
2,309
|
| Net
profit |
330
|
554
|
1,263
|
1,565
|
| EPS
(Rs.) |
36
|
60
|
138
|
171
|
| Cash
profit |
495
|
662
|
1,744
|
1,899
|
On a stand-alone
basis, Grasim’s revenues for the quarter stood at Rs. 2,690
crore (Rs. 2,615 crore). Interest cost rose by 90 per cent as
a result of commissioning of new projects and increased borrowings.
Depreciation too was higher by 38 per cent due to commissioning
of new projects. These, coupled with the constrained VSF business
performance and general slowdown in economy, impacted the net
profit which stood at Rs. 330 crore (Rs. 554 crore). For the
nine-months period, the company earned a net profit of Rs. 1,263
crore (Rs. 1,565 crore) and cash profit of Rs. 1,744 crore (Rs.
1,899 crore).
Highlights
of Grasim’s operations:
|
|
Q3
FY09
|
Q3
FY08
|
Per
cent change
|
| Production |
| Viscose
staple fibre |
M.T. |
51,777
|
70,839
|
-27
|
| Cement |
Mn.
M.T. |
4.00
|
3.69
|
9
|
| White
cement |
M.T. |
112,413
|
105,123
|
7
|
| Sponge
iron |
M.T. |
112,062
|
142,701
|
-21
|
| Caustic
soda |
M.T. |
52,176
|
50,452
|
3
|
| Sales
volumes |
| Viscose
staple fibre |
M.T. |
53,758
|
68,552
|
-22
|
| Cement |
Mn.
M.T. |
4.05
|
3.76
|
7
|
| White
cement |
M.T. |
109,972
|
103,879
|
6
|
| Sponge
iron |
M.T. |
115,410
|
135,205
|
-15
|
| Caustic
soda |
M.T. |
54,688
|
49,978
|
9
|
Viscose
staple fibre (VSF) business
The performance of VSF business was adversely affected due to
depressed consumer demand for textile globally. Sales volumes
were lower by 22 per cent. The company scaled down its production
considerably in view of the impaired sales. Operating profits
and margins dipped, also due to lower realisation, higher pulp
and sulphur cost and the weakening of rupee.
The demand
for VSF is expected to remain muted until such time the textile
consumption both in the domestic and western markets shows
some signs of recovery. Margins are expected to remain under
pressure, despite lower input costs, on account of further
reduction in realisation. The company has reduced the prices
of VSF further with effect from January, 2009 to prevent its
substitution by competing fibres and imports.
The performance
of VSF business is in line with global scenario.
Chemical
plant
In
caustic soda, production grew by 3 per cent, while volumes rose
by 9 per cent. Higher caustic prices were negated by the abnormally
low chlorine and HCL prices, which were down by almost 90 per
cent and 70 per cent respectively over the corresponding quarter.
Margins were depressed due to a steep increase in salt and power
costs. The lower demand from fibre segment is likely to affect
the caustic volumes.
Cement business
Production
of cement was higher by 9 per cent at 4 million tons. Volumes
at 4.05 million tons registered an increase of 7 per cent, aided
by new capacity and sectoral growth. RMC volumes too were up
by 18 per cent. Though realisations improved, the impact was
more than offset by the soaring input costs, thereby affecting
margins adversely.
Cement
subsidiary
UltraTech Cement Limited (UltraTech), a subsidiary of Grasim,
reported a lower net profit at Rs. 237 crore (Rs. 281 crore).
Variable costs escalated due to a sharp increase in prices
of coal and raw materials. The combined sales of cement and
clinker reflected a growth of 7 per cent.
Cement
capex plan
Grasim and UltraTech commissioned their clinkerisation units
at Shambhupura (Rajasthan) and Tadpatri (A.P.) respectively,
during the year. The split grinding units of Grasim at Dadri
(U.P.) and that of UltraTech at Ginigera (Karnataka) of 1.3
million tons each also became operational during the year. Additionally,
thermal power plants of 73 mw and 96 mw were commissioned by
Grasim and UltraTech respectively.
The grinding
unit of Grasim at Shambhupura and that of UltraTech at Tadpatri
(A.P.) are expected to be operational in Q4 FY09. At Kotputli
(Rajasthan), the clinkerisation unit is expected to be commissioned
in Q4 FY09, while the grinding unit is expected to go on stream
by Q1 FY10.
The real
estate sector continues to be plagued by inadequate demand
and poor availability of funds. The slowdown in construction
activities and corporate capital investments would lead to
slackening of demand for cement. The sector is now expected
to grow in line with GDP. The price of cement and consequently,
operating margins, may witness pressure in FY10 and FY11 owing
to the commissioning of large capacities in a phased manner
over the next two years.
Commissioning
and stabilisation of new capacities in Grasim and UltraTech
should spur growth in volumes. Going forward, the company
will continue to focus on sustaining plant performance and
optimising efficiencies.
Outlook
The company will continue to fortify its leadership position
in the Cement and VSF sectors. With substantial increase in
capacities, improved cost optimisation, higher productivity
and strong fundamentals, the prospects for the company appear
positive.
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