The Hindu Business Line : UltraTech posts 23% rise in Q1 net to Rs 259 cr

Mumbai, July 20 UltraTech Cements Ltd, an Aditya Birla Group company, has reported a 23 per cent jump in net profit to Rs 259 crore for the first quarter ended June 30, 2007, against Rs 211 crore in the same quarter last year.

Gross profit (before interest, depreciation and tax) rose to Rs 460 crore (Rs 388 crore), up 19 per cent.

Net sales in increased 16 per cent to Rs 1,356 crore (Rs 1,180 crore).

The cost of production escalated by 11 per cent quarter-on-quarter basis due to higher energy costs with coal prices increasing by as much as 22 per cent, said a company press release.

“Cement is an energy-intensive industry. It is dependent on the continuous availability of quality power and fuel. Securing energy on a regular basis and at economical rates poses a challenge,” said Mr Kumar Mangalam Birla, Chairman, UltraTech Cements.

Expansion plans

The company has lined up a capital expenditure of Rs 3,300 crore for the next three years for expansion and de-bottlenecking. UltraTech will invest Rs 1,000 crore in FY08.

The company will be setting up 225 MW power plant for captive consumption at its manufacturing centres with an investment of Rs 1,880 crore.

“Once these units start producing power we will be saving Rs 180 crore per annum in our power bills,” said Mr K.C. Birla, President and CFO of the company.

Hiking capacity at AP unit

“Considering the growing demand in the southern markets and the availability of slag, we have decided to augment the capacity in the Andhra Pradesh unit to 4.9 million tonnes (mt) from 4 mt with a total investment of Rs 1,000 crore,” he said.

The board has also approved setting up of a 33 MW thermal power plant at the company’s unit in Awarpur, Maharashtra.

The company plans to augment the grinding capacity of its Gujarat unit to 2 mt with an investment of Rs 370 crore.

It will spend Rs 84 crore on setting up 19 ready mix concrete (RMC) units at the company’s manufacturing facilities taking the RMC unit number to 26.

“Enthused by the projected growth in demand, additional capacities of around 90 mt have been announced. These are likely to be commissioned over the next three years and could result in a surplus scenario, thereby putting pressure on domestic prices from the middle of FY09. However, the demand for cement is expected to grow around 10 per cent linked to the Government’s continued initiatives for infrastructure development,” Mr Kumar Mangalam Birla said.