27 July 2012
Grasim reports financial results for Q1 FY12-13
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addition under implementation
||156K TPA 50 %
|10.2 Mn. TPA 20%
Consolidated financial performance:
Grasim Industries Limited, an Aditya Birla Group company, today announced its results for the 1st quarter ended 30th June 2012.
The company’s revenue increased by 16 per cent from Rs. 5,907 crore to Rs. 6,832 crore despite the challenging market conditions. PBIDT was marginally up at Rs. 1,767 crore (Rs. 1,748 crore) led by the enhanced performance of the cement business. However, due to higher taxes and increase in minority interest on higher cement profits, the net profit for the quarter was Rs. 718 crore against Rs. 752 crore in corresponding quarter.
Viscose staple fibre (VSF)
The weak global economic environment continues to impact the textile industry. Rupee depreciation led to higher input costs.
VSF sales volumes rose significantly by 40 per cent at 77,013 tonnes, driven by the uninterrupted operations at the company’s Nagda plant during the quarter. The plant was closed in the corresponding quarter for 27 days due to the water shortage. Average realisations were lower by 16 per cent on Y-o-Y basis despite the rupee depreciation, as prices were at their peak in the corresponding quarter of last year. The decline in realisations coupled with the increase in caustic soda and coal prices impacted profitability. The effect of higher caustic prices was however, reflected in the higher profitability of the chemicals business.
The acquisition of assets of Terrace Bay, a pulp mill in Ontario, Canada in a JV with Thai Rayon, a Group company was completed this week and the production should restart by October 2012. This will help in meeting the increasing pulp requirement after the mill is converted into a dissolving grade pulp mill.
Cement subsidiary (UltraTech Cement)
UltraTech reported improved performance for the quarter. Cement sales volume for the quarter at 10.83 million tonnes was higher by 5 per cent. Net revenue stood at Rs. 5,363 crore as compared to Rs. 4,589 crore, an increase of 17 per cent. Net profit at Rs. 764 crore was up by 14 per cent.
The variable cost rose by 10 per cent mainly on account of higher energy and raw material prices due to the increase in railway freight and diesel prices. Although imported coal prices softened by around 19 per cent, the depreciation in rupee by 21 per cent offset the benefit.
The chemicals business also reported good performance. The plant operated at full capacity on the strength of captive consumption of chlorine in value added products, though the industry capacity utilisation was impacted due to lower chlorine off take in markets. Caustic sales volumes increased by 28 per cent to 69,466 tonnes consequent to the uninterrupted plant operations. Caustic prices remained firm in line with international prices.
VSF and chemicals capex
The VSF (156,000 TPA) and chemicals (182,500 TPA) expansions are on track. The expansion in Harihar, Karnataka will go on stream in two phases in the 2nd quarter and the 4th quarter during the current year. Projects at Vilayat, Gujarat are slated for commissioning towards the end of the current financial year.
The Chhattisgarh and Karnataka brownfield expansions are on track and are expected to be operational by Q1 FY13-14. Consequently, UltraTech’s cement capacity will be enhanced by 10.2 million TPA to total 62 million TPA.
In VSF, stability in the Euro Zone and macro-economic policies will influence demand. The cotton crop in the ensuing season will influence realisations in the short term. In cement, despite the 8 per cent projected growth in demand, the surplus scenario is likely to continue for three years.
Capacity expansions under implementation in both VSF and cement will provide additional volumes, driving growth and will further consolidate the company’s leadership.
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.