Lower volumes and price realisation led to a 13.5% drop in the net profit of Aditya Birla Group company UltraTech Cement for the first quarter ended June 30, 2013. The net profit stood at R673 crore while total income from operations fell by a moderate 2.1% to R4,980 crore.
Meanwhile, the company?s Board revised the capital expenditure outlay to R13,700 crore, a R2,100-crore increase towards setting up of grinding units and ready mix concrete plants across the country and also towards modernisation. Addressing a shareholder’s query at UltraTech’s 13th AGM on Monday, chairman Kumar Mangalam Birla said the company’s capex for FY14 will be R4,227 crore.
He added that half of the funds for capex will be raised through external debt while the remaining will be through internal accruals. The company?s consolidated net debt at the end of June, 2013 stood at R7,000 crore.
The company is in the process of ramping up capacity by another 10 million tonne by 2015. This will result in total cement capacity getting augmented to 64.45 million tonne.
Later commenting on the results, UltraTech’s chief financial officer, KC Birla, told newspersons that surplus capacity scenario along with lower demand has put pressure on cement prices and the company?s realisations impacting profitability.