UltraTech Cement Consolidates Its Position
The major highlight of the quarter was completing the acquisition of Binani Cement Limited (BCL) on 20th November, 2018. Upon infusion of funds by the Company; taking over management control and re-constitution of the Board of Directors, BCL has become a wholly-owned subsidiary of the Company with effect from 20th November, 2018. BCL has been re-named as UltraTech Nathdwara Cement Limited (UNCL), from 13th December, 2018.
The acquisition provides the Company access to large reserves of high quality limestone. It consolidates the Company’s leadership in the fast growing Northern and Western markets in the country. The Company is confident of turning around the operations at the acquired plants, which will benefit all stakeholders and also result in synergies from optimisation of costs and improved realisations.
(Rs. in Crore)
Acquisition of 21.2 mtpa capacity in 2017
The Company has successfully integrated the 21.2 mtpa cement capacity acquired in 2017. With substantial improvements carried out, these plants are now operating in line with the existing plants of the Company and have achieved a stable capacity utilisation of ~ 75%. One of the plants in the Central region underwent a major overhauling during this quarter and has achieved cost improvements, from which the Company will derive benefits from Q4. The acquisition is generating incremental earnings as planned, which are growing month on month.
Net Sales rose 19% to Rs. 9,258 crore from Rs. 7,779 crore over the previous year. Profit before Interest, Depreciation and Tax was Rs. 1,548 crore vis-à-vis Rs. 1,494 crore in the corresponding period of the previous year.
Domestic Sales volume jumped 15% over Q3FY18. Higher fuel and energy costs, coupled with rupee depreciation resulted in costs increasing by 11% over Q3FY18. Additionally, interest costs are higher due to the loans raised for the acquisition of UNCL.
The Scheme of Arrangement amongst Century Textiles and Industries Limited (“Century”), the Company and their respective shareholders and creditors (“the Scheme”), which was earlier approved by the Board of Directors, has since received the approval of the stock exchanges, the Competition Commission of India and the shareholders of the Company. The Scheme is now subject to the approval of the National Company Law Tribunal and other regulatory authorities as may be required.
Demand is witnessing an upward movement with higher spends on infrastructure and government sponsored housing program. With the additional capacities acquired by the Company through the organic and inorganic route and its rapid ramp-up, UltraTech is very well placed to participate in the growth of the economy.