Q2 Results: UltraTech Cement’s Profit Misses Estimates On Rising Energy Costs, Weaker Rupee

UltraTech Cement Ltd.’s profit in the quarter ended September missed forecast weighed down by rising energy costs and a depreciating rupee.

Net profit fell 9.3 percent year-on-year to Rs 391 crore in the July-September period, according to its exchange filing. That compares with the Rs 418-crore consensus estimate of analysts tracked by Bloomberg. Revenue of the Aditya Birla group flagship company rose 21 percent to Rs 7,771.3 crore. Analysts had expected a top line of Rs 7,873 crore.

The company’s adjusted operational performance, however, was in line with analysts’ estimates. Earnings before interest, tax, depreciation, and amortisation declined 4.3 percent to Rs 1,293 crore, against Bloomberg’s estimate of Rs 1,328 crore.

Energy costs, which account for a third of the company’s overall expenses, rose 19 percent year-on-year to Rs 1,099 per tonne during the period. Prices of pet coke, a key raw material in cement making, also increased close to 20 percent, it said in a press release. Overall, the cost of raw materials rose 5 percent on a yearly basis to Rs 503 a tonne during the quarter.

That’s when the rupee depreciated 4.5 percent sequentially in the July-September period. The cement maker said a fall in the value of rupee increased energy costs by 3 percent.

Other Highlights:

• Capacity utilisation fell to 65 percent from 73 percent in the June quarter.
• Sales volume stood at 15.7 million tonnes compared to an estimated 16 million tonnes.
• The company’s acquisition of Century Cement is subject to shareholders and regulatory approvals.
• Realisation per tonne rose 1.1 percent to Rs 5,004.
• Ebitda per tonne was down 20 percent to Rs 824.

Shares of company fell 5.3 percent, the most in 10 months, to Rs 198 apiece after the earnings announcement.