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Shree Cement has posted 77% drop in net profit to Rs 49.33 crore in spite of 21% jump in total income from operation to Rs 2,586.59 crore for second quarter ended September 2018. The decline in bottomline was largely attributed to jump in operating expenses by 31% to Rs 2,066.86 crore (due to higher other expenses and power cost as percent of net sales) as compared to 21% jump in sales revenue, resulted in the contraction in OPM by 610 bps to 20.1%. Thus, operating profit declined by 19% to Rs 575.21 crore. The exceptional losses of Rs 178.13 crore in financial instruments also weighed down bottomline.
Performance for the quarter ended September 2018
Total income from operation (including the power segment revenue) inclined 21% to Rs 2,586.59 crore for the second quarter ended September 2018. The gain in topline was due to jump in revenue from cement segment by 18% to Rs 2,407.05 crore (84% of total revenue) and gain in power business segment revenue by 33% to Rs 442.42 crore (16% of total revenue).
The Operating Margin (OPM) contracted by 610 bps to 20.1%. The reduction in OPM was due to jump in other expenses by 470 bps to 20.2% and power & fuel cost by 440 bps to 23.5% as percentage to sales and net of stock adjustments. As a result, the operating profit dropped by 7% to Rs 519.73 crore.
The other income sank by 48% to Rs 51.37 crore. The interest cost gained 63% to Rs 61.78 crore and depreciation went up 46% to Rs 329.48 crore. The PBT before EO, as a result, declined 55% to Rs 179.84 crore. The Company booked EO exceptional losses of Rs 178.13 crore in financial instruments during period. As a result, PBT after EO dropped 100% to Rs 1.71 crore. With net tax credit of Rs 47.62 crore, the company booked net profit of Rs 49.33 crore, down by 77% from Rs 211.50 crore in corresponding previous quarter.
Half yearly performance
Total revenue (including the power segment revenue) inclined 20% to Rs 5,656.50 crore for the six month ended September 2018. OPM reduced by 410 bps to 19.4%, thus, OP slid by 14% at Rs 1,094.94 crore. Other income fell by 26% to Rs 145 crore. The interest cost increased by 67% to Rs 117.97 crore. The depreciation went up 39% to Rs 635.01 crore. The PBT before EO, as a result, declined 48% to Rs 486.96 crore. The Company booked EO exceptional losses of Rs 178.13 crore in financial instruments during period. As a result, PBT after EO dropped 67% to Rs 308.83 crore. With net tax credit of Rs 19.98 crore, the company booked net profit of Rs 328.81 crore, down by 50% from net profit of Rs 651.61 crore in corresponding previous period.
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.
The scrip is currently trading at Rs 15,391.00 (12 November 2018) on the BSE.
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