The Hindu Business Line : UltraTech net up 58% on lower cost, capacity addition

Mumbai, July 21 UltraTech Cement, an Aditya Birla Group company, has reported a 58 per cent jump in net profit in the first quarter ended June 30, 2009 largely due to increase in volume growth and fall in operational costs.

Mr K.C. Birla, Chief Financial Officer, UltraTech Cement, said the net profit was boosted by the 14 per cent rise in production at 4.52 million tonnes and fall in variable cost, including power and coal.

“The company has access to about 236 MW of captive thermal power, catering to 80 per cent of its requirements,” he added.

The domestic realisation was up 10 per cent at Rs 216 for a 50-kg bag over the last sequential quarter, while in the export market prices fell by three per cent. The coal cost in the quarter was substantially lower at $85 a tonne. The capacity utilisation remained flat at 95 per cent on expanded capacity.

The company’s capacity was 23.10 million tonnes following the commissioning of an additional 1.2 million tonnes at Andhra Pradesh Cement Works. The company proposed to invest Rs 2,000 crore in the next two years. It would spend Rs 900 crore this year. The capex would be largely funded through internal accruals.

The company shares on BSE closed with a gain of 0.67 per cent at Rs 776 on Tuesday.

UltraTech Cement has spent Rs 3,200 crore to augment the cement capacity, besides setting up thermal power plant in the last few years.

Speaking at the ninth Annual General Meeting on Tuesday, Mr Kumar Mangalam Birla, said, “New capacities, which are at various stages of commissioning by the industry, will inevitably result in a fall in capacity utilisation from second half and squeeze margins.”

“The company’s steps in the form of capacity addition, new thermal power plants and capital productivity should partially offset the impact on margins,” he added.

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