Highlights-

• The gross sales of the company during the 1^st quarter ended June 2010 increased 4% to Rs 623.09 crores as compared to the corresponding quarter of the previous year.
• Off the total revenue, Rs 198 crore was contributed by the integrated sugar business of the company while around Rs 425 crore was contributed by the cement and the thermal power business.
• The sugar volume increased 15% whereas the cement volume increased 7% during the quarter, and the realization for sugar increased 18% while for cement the realization fell 12% during the quarter under review.
• The PBIDTA margin fell significantly to 11.5% during the quarter under review, as a result the PBIDTA fell 60% to Rs 64.88 crore on a year-on-year basis.
• The company posted a net loss of Rs 19.09 crore during the quarter ended June 2010 as compared to net profit of Rs 58.57 crore during the corresponding quarter of the previous year.
• The all India cement prices fell 2% during the quarter ended June 2010 on y-o-y basis. The eastern market witnessed a firm 3% increase in price during period; however the price fall in south was steeper at 11%. Flat Andhra Pradesh demand and high capacity addition in this region impacted the prices significantly.
• Going ahead the company anticipates 17% increase in capacity addition in FY 2011.
• The all India cement demand during the quarter rose by a healthy 7% to 52 million metric tonnes whereas the demand in South remained flat during the period under review at 14.1 million metric tonnes. However strong demand was witnessed in the eastern market with 8% year-on-year growth at 9 million metric tonnes.
• The demand in Andhra Pradesh and Kerala fell by 7% and 3% respectively while the demand in Karnataka and Tamil Nadu rose 11% and 2% respectively during the quarter ended June 2010 as compared to quarter ended June 2009.
• The company currently is making negative cement EBIDTA per tonne in the Andhra Pradesh market, while the EBIDTA per tonne in Tamil Nadu and Kerala is around Rs 600-700 per metric tonne.
• The company's cement production increased to 1.06 million metric tonnes during the quarter as compared to 9.94 lakh metric tonnes of cement during the same period last year thus clocking a growth of 7% whereas it sold 1.02 million metric tonnes of cement during the quarter ended June 2010 as compared to 9.59 lakh metric tonnes during the same period of last year.
• 43% of the company's produce during the first quarter ended June 2010 was sold in Tamil Nadu, whereas Kerala, Karnataka and Andhra Pradesh contributed 27%, 13% and 9% of the company geographic mix.
• The net realization per tonnes of cement corrected 12% to Rs 3,492 per metric tonnes during the quarter under review as compared to Rs 3,958 per metric tonnes during the corresponding quarter of the previous year. The net realization was however up 11% quarter-on-quarter.
• The EBIDTA per tonne corrected 54% to Rs 646 per metric tonnes during the quarter as compared to Rs 1397 per metric tonne in Q1 FY 2010.
• The cement-clinker ratio during the quarter was 1.29. 64% was PPC production.
• The landed coal price during the quarter was Rs 5200 per metric tonne.
• Price reduction and write down of inventory impacted the margins in the sugar business of the company. The upward revision in levy pricing from Rs 13500 per metric tonne to Rs 18200 per metric tonne resulted in positive EBIDTA contribution of Rs 13 crore during the quarter under review. However due to inventory write-down the company's sugar business incurred a net loss of Rs 18 crore during the quarter under review.
• The all India sugar production during the current sugar year is estimated to increase by 25% to 18.8 million metric tonnes. As a result the production would outstrip demand thus resulting in inventory build-up.
• However the domestic price of free sugar continued to fall as the industry absorbs additional supply due to revision in production estimates upward. The re-imposition of import duties on raw sugar would check further fall in sugar prices to some extent.
• The sugar production during the quarter ended June 2010 fell 31% to 10006 metric tonnes while the sugar sales rose 15% to 60,784 metric tonnes as compared to the corresponding quarter of the previous year.
• During the quarter under review the sugar realization improved 18% to Rs 26637 per metric tonnes.
• Crushing was nil due to non availability of sugar cane.
• The co-gen power generation increased 31% to 3.60 lakh kwh while power export increased 34% to 3.14 lakh kwh during the quarter under review. Increased power generation was due to installation of multi-fuel boilers.
• The total debt as on June 2010 in the company's book is around Rs 2854 crore, of which Rs 2292 is long term, whereas the rest is sales tax and working capital loan.
• The cash and cash equivalent as on June 2010 is Rs 532 crore. Of this around Rs 41 crore is invested in marketable securities, Rs 198 crore in Mutual funds and Rs 293 crore is cash.
• OCL's net sales during the quarter under review rose 3% to Rs 361 crore as compared to the corresponding quarter of the previous year. The EBIDTA margin corrected 400 bps to 29%. As a result the EBIDTA fell 10% to Rs 104 crore. The net profit after tax fell 26% to Rs 42 crore.
• OCL's cement production fell 1% to 8.29 lakh metric tonnes while the cement sales fell 6% to 7.57 lakh metric tonnes during the quarter. The cement sales realization however increased 7% to Rs 3934 per metric tonnes.
• The total debt in the book of OCL was Rs 761 crore, while the cash and cash equivalent as on June 2010 was Rs 296 crore.
• The company has received the approval of the stock exchanges as well as Madras High court for the recently proposed re-structuring exercise.
• A separate entity- Dalmia Bharat Enterprise, which will have the cement undertaking, refractory undertaking and thermal power undertaking, will be listed by the 3^rd quarter of the current fiscal.
• Of the proposed Rs 750 crore PE (KKR) investments in the company's cement vehicle, around Rs 500 crore would be received during the current quarter.
• The realizations in cement and sugar going ahead are expected to be under pressure. The company is currently selling sugar at below cost of production. For e.g. the sugar prices are roughly Rs 26 a kg right now, while the cost of production is close to Rs 29 a kg. If the levy sugar which is at Rs 18 per kg is included, then the blended sugar selling price is Rs 25 a kg.
• The next 2-3 quarters is expected to be challenging for sugar realization.
• The total cement capacity utilization currently stands at about 55%. The company plans to ramp this up to 75% over the next few quarters.