|
PRESS
RELEASE
25
January 2011
Grasim
announces results for Q3 ended 31 December 2010
Click
here to view the results
|
Rs.
crore
|
| Consolidated
net revenue |
5,461
|
| Consolidated
net profit |
502
|
| Capex
under Implementation |
|
| |
VSF
& Allied Chemicals |
3,400
|
| |
Cement |
10,150
|
Consolidated
Financial Performance:
Grasim Industries Limited, an Aditya Birla Group company, today
reported its results for the 3rd quarter ended 31st December
2010.
Grasim’s consolidated revenue for the quarter at Rs. 5,461
crores (Rs. 4,846 crores) reflects a 13 per cent growth. Net
profit stood at Rs. 502 crores as against Rs. 580 crores in
the corresponding quarter. The results include financials of
Star Cement Company LLC and its subsidiaries, which have been
acquired by UltraTech Cement, a subsidiary of Grasim. The VSF
business continued to post good performance driven by the strong
demand environment. The cement business remained impacted by
excess supply and higher energy costs. On QoQ basis, cement
business saw a partial recovery in prices, post monsoons.
Sequentially, net profit soared by 55 per cent from Rs. 323
crores to Rs. 502 crores.
|
Rs.
crore
|
| |
Quarter
ended
|
Nine
months ended
|
|
31.12.10
|
31.12.09
|
%
Change |
31.12.10
|
31.12.09
|
%
Change |
| Net
revenue |
5,461
|
4,846
|
13
|
15,083
|
14,720
|
2
|
| PBIDT |
1,267
|
1,511
|
(16)
|
3,615
|
4,822
|
(25)
|
Net
profit
(before extraordinary item) |
502
|
580
|
(14)
|
1,400
|
2,105
|
(33)
|
Growth
in production and sales volumes:
| |
|
Production
|
Sales
|
|
|
Q3FY11
|
Q3FY10
|
Per
cent change
|
Q3FY11
|
Q3FY10
|
Per
cent change
|
| Products |
| Cement |
Mn.
M.T. |
*10.07
|
9.00
|
12
|
*10.08
|
9.17
|
10
|
| White
cement |
M.T. |
147,228
|
137,523
|
7
|
143,602
|
130,188
|
10
|
| Viscose
staple fibre |
M.T. |
83,026
|
81,991
|
1
|
84,621
|
81,306
|
4
|
| *Including
Star Cement volumes |
Viscose
Staple Fibre (VSF)
The unprecedented rise in cotton prices benefitted VSF. Globally,
prices were firm with rising spot pulp prices resulting in better
VSF price in China.
Production was at 83,026 tons with full capacity utilisation.
Revenue recorded 17 per cent growth backed by increase in sales
volumes by four per cent at 84,621 tons and improved realisations.
Pulp prices have risen by 35 per cent over the last year, which
resulted in decline in operating margins at standalone level.
VSF capex
The Company is setting up a 120,000 TPA VSF plant at Vilayat
(Gujarat) at an investment of Rs. 1,690 crores. The product
mix will be in line with the market needs. In addition, the
capacity at Harihar (Karnataka) will be raised by 36,500 TPA
through a brownfield expansion at a capex of Rs. 449 crores.
Both these projects are slated for commissioning in FY13.
VSF outlook
Trends in China, prices of competing fibres and pulp will largely
govern VSF prices. Prices are expected to remain firm in line
with the competing fibres albeit with volatility. The company
will continue to focus on market enlargement through product
innovation and application development.
Chemical business
The chemical business attained the highest-ever production and
sales volumes, supported by a capacity utilisation of 104 per
cent. ECU realisations grew by 10 per cent on a YoY basis led
by the recovery in chlorine and HCL prices.
The demand outlook for caustic looks positive with the increased
offtake from the aluminium industry. Prices are expected to
improve with a gradual increase in capacity utilisation. A 182,500
TPA caustic plant and a 60 MW power plant at Vilayat mainly
for captive use is on the anvil. This will entail an investment
of Rs. 772 crores.
Cement subsidiary (UltraTech Cement)
Volumes grew by two per cent in line with industry. Industry
demand growth was unexpectedly low due to prolonged monsoons
and the political climate in the south. Bottlenecks in the availability
of construction inputs and lower spends in realty and infrastructure
projects further impacted the demand. Overall volume including
Star Cement grew by 10 per cent. The recently acquired Star
Cement Group of companies achieved a capacity utilisation of
80 per cent despite challenging conditions in the Middle East.
White cement sales volumes were up by 10 per cent. Lower realisations
and higher energy cost led to decline in operating margins.
However, margins rose from 14.4 per cent to 19.5 per cent sequentially
with better realisation.
Cement capex
In line with its strategy to scale up presence in the cement
sector, brownfield expansions aggregating to 9.2 million TPA
at Chhattisgarh and Karnataka units with related grinding units
and bulk terminals are under implementation. Capex of Rs. 5,600
crores has been earmarked for these projects. Major equipment
have already been tied up.
An additional capex of Rs. 4,550 crores has been allocated for
the augmentation of the grinding and evacuation facility, logistics
infrastructure, captive thermal power plant, modernisation and
completion of existing projects.
Cement Outlook
The demand for cement is likely to grow by 10 per cent in the
long term linked to government initiative to boost infrastructure
spending together with a revival in the corporate capex cycle.
Good monsoons across the country augur well for the business.
The growth rate can decline in the short term if the present
market conditions continue
going forward.
With strong demand growth, the margins are likely to return
gradually back to normalcy sometime in FY13. The company’s
focus on higher volume growth, better logistics support together
with cost efficiency, should help in augmenting its performance.
Standalone Financial Performance
With regard to the standalone performance, revenues were higher
by 19 per cent. Net profit increased by eight per cent.
|
Rs.
crore
|
| |
Quarter
ended
|
Nine
months ended
|
|
31.12.10
|
31.12.09
|
%
Change |
31.12.10
|
31.12.09
|
%
Change
(over restated) |
| |
|
|
|
(Restated) |
(As
Reported) |
| Net
revenue |
1,257
|
1,058
|
19
|
3,184
|
2,840
|
7,172
|
12
|
| PBIDT |
448
|
470
|
(5)
|
1,234
|
1,192
|
2,576
|
4
|
Net
profit
(before extraordinary item) |
283
|
262
|
8
|
786
|
695
|
1,467
|
13
|
| * The
reported results for the nine months ended 31st December,
2009 are not comparable as the same included results of
the Sponge Iron and Cement Businesses, which have been
sold / demerged during the Financial Year 2009-10, effective
from 22nd May, 2009 and 1st October, 2009 respectively.
Hence, the restated results, excluding the results of
the Sponge Iron and Cement Businesses, have been given
for last year for better comparison. |
Outlook
The long term prospects of the company remain positive, given
its leadership position in both cement and VSF businesses, its
focus on profitable growth and strong fundamentals. The substantial
increase in capacities, improved cost optimisation and higher
productivity bode well for the company in the years to come.
Cautionary Statement
Statements in this “Press Release” describing the
company’s objectives, projections, estimates, expectations
or predictions may be “forward looking statements”
within the meaning of applicable securities law and regulations.
Actual results could differ materially from those express or
implied. Important factors that could make a difference to the
Company’s operations include global and Indian demand supply
conditions, finished goods prices, feedstock availability and
prices, cyclical demand and pricing in the Company’s principal
markets, changes in Government regulations, tax regimes, economic
developments within India and the countries within which the
Company conducts business and other factors such as litigation
and labour negotiations. The Company assumes no responsibility
to publicly amend, modify or revise any forward looking statement,
on the basis of any subsequent development,
information or events, or otherwise. |
