Shree Cement reports Rs 177 cr net profit

Kolkata, May 14 (UNI) Shree Cement Limited, North India's leading cement manufacturer, registered a net profit of Rs 177 crore compared to Rs 18.40 crore in the previous year.

A company release said net profit for the year was impacted on account of (i) additional depreciation of Rs 199.47 crore on account of change in its accounting policy for depreciation on plant and machinery of Unit-II and (ii) provision of depreciation of Rs 114.58 crore on account of Unit-IV and attached Captive Power Plant commissioned on March 26.

A company release mentioned it has reported 181 per cent increase in operating profit for 2006-07 at Rs 632.87 crore against Rs 225.18 crore in the previous year.

A company said turnover of the company doubled to Rs 1367.98 crore from Rs 669.39 crore.

Cash earning per share has also gone up from Rs 52.98 to Rs 148.65 while basic earning per share has shown 10 fold rise from Rs 5.28 to Rs 50.81.

Company's Board has recommended an interim dividend of Rs 6 per share paid in March 2007 to be considered as final dividend for 2006-07.

For the quarter ended March 2007, company has reported a 67 per cent increase in its turnover to Rs 378.27 crore from Rs 226.62 crore recorded in the corresponding quarter of previous year.

The operating profit has gone up by 117 per cent from Rs 83.32 crore to Rs 180.55 crore.

The operating profit margin during the quarter stood at 47.73 per cent of net sales against the earlier 36.77 percent has shown remarkable improvement.

Cement production during the year went up by 49 per cent to 4.8 million tonnes against 9.9 per cent increase witnessed by the cement industry. Company's sales grew 51 per cent to 4.83 million tonnes.

The capacity utilization of the company stood at 116 per cent against industry average of 94 per cent.

Company has experienced all round increase in costs during the year on account of rising raw material and fuel prices, staff and administrative costs. However, it has been successful in absorbing the cost push on account of its innovative management practices. One of the units of the Company.

The company has been successful in capitalising the present better market conditions by increasing its production volume.

Company has once again demonstrated its project management capabilities and commissioned its Unit -IV of 1.50 million ton cement capacity at Bangur City, Ras, Dist. Pali Rajasthan in March last which is well within the targeted time and budget. The full benefit of this new plant would accrue from financial year 2007-08.

The cement industry has recorded another year of double digit demand growth (10% for 2006-07). The demand buoyancy is witnessed across sectors with increased focus on infrastructure development, rising industrial activity and strong real estate demand from commercial and residential sectors. With high growth projections for Indian economy, the industries likely to witness strong cement demand for some more years. Industry is also expected to have almost 80 Million Tonnes capacity additions over next 4-5 years to match the expected demand growth.

The work on further expanding the capacity (Unit V&VI) at Bangur City, Ras was running as per schedule. The Unit -V which is a clinkerisation unit, is expected to be commissioned by third quarter of 2007. Unit -VI a full integrated unit is scheduled to be completed in second quarter of 2008. The work of grinding unit at Khushkhera, near Gurgaon is also running as per schedule. First unit of 2.00 MTPA is nearing completion and is expected to be commissioned by second quarter of 2007. The second unit of 1.50 MTPA is scheduled for completion by third quarter of 2007.

Once the above capex programme was completed, the production capacity of the company would increase to more than 9 million tonnes per year. Company has now envisioned a target of achieving 20 Million Tonne capacity by 2012 and is actively working in this direction for setting up new plants in other states as well.

UNI