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Shree Cement has posted 10% drop in net profit to Rs 301.29 crore in spite of 21% jump in total income from operation to Rs 2,780.63 crore for third quarter ended December 2018. The decline in bottomline was largely attributed to jump in interest cost (up 186% to Rs 59.30 crore) and depreciation cost (up 60% to Rs 336.09 crore). Operating Margin (OPM) increased by 80 bps to 25.5%. Thus, operating profit (OP) rose 25% to Rs 710.05 crore.
Performance for the quarter ended December 2018
Total income from operation (including the power segment revenue) inclined 21% to Rs 2,780.63 crore for the third quarter ended December 2018. The gain in topline was due to jump in revenue from cement segment by 16% to Rs 2,559.38 crore (84% of total revenue) and gain in power business segment revenue by 44% to Rs 502.60 crore (16% of total revenue).
OPM increased by 80 bps to 25.5%. The increment in OPM was due to drop in freight & forwarding cost by 220 bps to 23.4%, employee cost by 30 bps to 6% and other expenses by 20 bps to 13.9% partially offset by increase in power & fuel cost by 190 bps to 23.6% as percentage to sales and net of stock adjustments. As a result, the OP rose 25% to Rs 710.05 crore.
The other income declined by 37% to Rs 55.31 crore. The interest cost gained 186% to Rs 59.30 crore and depreciation went up 60% to Rs 336.09 crore. Thus, PBT dropped 13% to Rs 369.07 crore. The tax outgo fell 26% to Rs 68.68 crore, thus, net profit declined by 10% to Rs 301.29 crore.
Nine Months ended December performance
For Nine Months ended December 2018, total revenue (including the power segment revenue) inclined 20% to Rs 8,437.13 crore. OPM reduced by 410 bps to 21.4%, thus, OP slid by 2% at Rs 1,804.99 crore. Other income fell by 30% to Rs 200.31 crore. The interest cost increased by 94% to Rs 177.27 crore. The depreciation went up 46% to Rs 971.10 crore. The PBT before EO, as a result, declined 37% to Rs 856.93 crore. The Company booked EO exceptional losses of Rs 178.13 crore in financial instruments during period. As a result, PBT after EO dropped 50% to Rs 678.80 crore. The tax outgo fell 87% to Rs 48.70 crore, thus, net profit declined by 36% to Rs 630.10 crore.
Annual Financial Performance
For the financial year ended March 2018 (FY 2018), total revenue (including the power segment revenue) inclined 14% to Rs 9,833.10 crore. The gain in topline was due to jump in revenue from cement segment by 7% to Rs 9,726.52 crore (87% of total revenue) while power business segment revenue was flat at Rs 1450.07 crore (13% of total revenue).
OPM reduced by 410 bps to 25.1%, thus, OP slid by 2% at Rs 2,472.78 crore. Other income grew by 8% to Rs 389.05 crore. The interest cost rose 5% to Rs 135.27 crore. The depreciation went down 26% to Rs 899.40 crore. Thus, the PBT increased 19% to Rs 1,827.16 crore. With jump in the tax outgo by 131% to Rs 442.98 crore, the net profit grew by 3% to Rs 1384.18 crore.
Key Update
Company has commissioned Clinker Section of 3.0 MTPA Integrated Cement Plant at Kodla in Kalaburagi (erstwhile Gulbarga) District of Kamataka on 25th December, 2018. The Cement Mill section of this plant was already completed on 28th June, 2018. With this the integrated cement plant has been fully commissioned.
Interim Dividend
The Board of Directors of the Company at its meeting held on 22nd January, 2019, has declared Interim Dividend of Rs.25 per equityshare of Rs. 10 each for the Financial Year 2018-19. The same will be payable to those shareholders who hold the equity shares of the Company on the record date i.e. 30th January, 2019.
The scrip is currently trading at Rs 16,178.50 (23 January 2019) on the BSE.
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