Analyst Meet / AGM 01-Aug-19
Conference Call
Heidelberg Cement India
Expects cement demand likely to grow in mid single digit in CY19
The company has conducted a conference call on 31
st
July 2019 to discuss the financial performance for the first quarter ended June 2019 and way forward. Mr. Jamshed Naval Cooper –Managing Director and Mr. Anil Sharma –Chief Financial Officer of the Company addressed the conference call.
Key highlights
As on 30th June 2019, all India installed cement capacity of ~480 mt. Cement Industry reported production volume growth of 11% in last twelve months, driven by growth in infrastructure and rural housing. During FY19, Cement Industry operated at an average utilization of c. 70%; FY20 has started on low capacity utilization.
The Company reported a 55% increase in net profit at Rs 79.03 crore on 10% jump in total income from operation to Rs 601.06 crore for the first quarter ended June 2019 (Q1FY20). EBITDA increased by 33% to Rs 1,253/tonne. The company achieved its highest ever quarterly revenue, Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and Profit after Tax (PAT).
For Q1FY20, company (HCIL) sales volume declined 1% to 1.26 mt, as clinker sales were absent in Q1FY20 sales and as softness was witnessed in demand, especially from government projects. Total cost per tonne was higher mainly due to increase in raw materials and fuel cost which has been partially offset by lower logistics cost.
For Q1FY20, company reported cement capacity utilization of 90%. The company's product mix includes only blended cement with share of trade sales in the total pie at 86%. Mycem power (premium product) volume increased 53% and forming 13% of trade sales.
Pet coke prices fell by 8%-12% to Rs10,500/t in Q1FY20. With petcoke prices stabilising, a further reduction in P&F costs is expected in Q2FY20E. WHRMS suffices for ~16% of the company's power requirement.
The Company lead distance stood at ~400 kms, with 45% of volumes being transported via roads (flat YoY)
The company maintained capex guidance of Rs 50 crore for FY20.
The company expects capacity debottlenecking would be completed by CY20 end. The company's current capacity was at 3.5 mt for clinker and grinding capacity would increase to 5.9 mt post de-bottlenecking operations
The company expects demand to grow 6-7% in CY2019 and the growth would largely come from Tier-II/III cities. The company expects stability in Govt. will increase the speed of investments in infrastructure projects i.e. concrete roads, railways, metros, civil aviation, irrigation, mega Industrial and freight corridors etc.
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