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Carborundum Universal Limited financial
results
- Net Sales grew by 23 per cent
- Operating EBITDA up by 29 per cent
Chennai, 24 July, 2008: The
Board of Directors met today and approved the unaudited financial
results for the quarter ended 30th June 2008.
Q 1 FINANCIALS
Net Sales grew to Rs.157 crores, a growth of 23 per cent over the
first quarter of last year. Exports registered strong growth of
65 per cent , from Rs. 18 crores to Rs. 30 crores.
Input costs including prices of key raw materials
and fuel / power have increased, resulting in pressure on margins.
Internal efficiencies are being focused upon to partly obviate cost
increases. Further, Price increases are also being undertaken in
a phased manner.
During the quarter, the Company contributed Rs. 4
Crores as part of the Corporate Social Responsibility (CSR) initiatives.
EBITDA (without reckoning the above contribution)
grew from Rs. 26 crores to Rs. 33 crores, a growth of 29 per cent;
the profit before tax was Rs. 21 crores (previous year Rs. 17 crores).
After considering the contribution made towards CSR
initiatives, profit before tax remained at last year level at Rs.
17 crores.
OPERATIONS
Abrasives
Abrasives achieved a sale of Rs. 96 crores (previous year Rs. 84
crores), a growth of 15per cent. There was a slowdown in off take
from Auto OE/Ancillary industries. Despite this, sales to other
sectors helped to achieve double digit growth. The order inflow
and sales of non-standard products registered strong growth rates.
PBIT of the Abrasives business increased by 12per cent.
Ceramics
Sales registered a 27per cent growth, from Rs. 30 crores to Rs.
38 crores aided by good growth from HT insulators, power generation,
coal washeries, steel, cement, carbon black and glass sectors. Strong
growth was witnessed in both the domestic and export market. The
division witnessed a strong growth of 26per cent in PBIT.
Electrominerals
Turnover grew from Rs. 23 crores to Rs. 31 crores, a growth of 34per
cent. All product lines viz., brown fused alumina, white fused alumina
and silicon carbide performed well. The division nearly doubled
its PBIT aided by the strong growth in volumes and product mix.
GROWTH INITIATIVES
The Metallised Cylinders plant being set up in Hosur is nearing
completion and expected to go on stream in September 2008. Construction
of the new facility for manufacture of super refractories and anticorrosion
products in Vellore District is also progressing well and is expected
to be completed in November 2008.
The Abrasives facility at Uttarkhand, the wear resistant
tiles plant at Hosur and the engineered ceramics unit at Aurangabad,
which were the major investments of last year, are stabilizing and
scaling up production levels.
An Agreement has been entered into, for acquiring
a 51per cent equity stake in Foskor Zirconia (Proprietary) Limited,
Phalaborwa, South Africa, (FZL). With a 4200 tons per annum installed
capacity for Zirconia, FZL is the 3rd largest producer of Zirconia
in the world.
CONSOLIDATED OPERATIONS
Consolidated net sales was Rs.293 crores as against Rs. 165 crores
last year. The current quarter results includes operations of Volzhsky
Abrasive Works, Russia, (VAW), which was acquired in September 2007.
The operations of VAW benefited significantly by the
hardening minerals prices across the globe. The operations of the
joint venture in China registered a growth of 12per cent. In Australia,
continued buoyancy in the coal sector helped to ramp up sales by
80per cent. The Company also strengthened its presence in the Middle
East markets through its subsidiary. Other subsidiaries and joint
ventures also performed well, except in North America where the
slowdown in the U.S. economy dented sales.
Profits before tax (before contribution as part of
CSR initiatives) increased from Rs. 25 crores to Rs. 37 crores.
OUTLOOK
With rising inflation and the Government’s decision to reign
in inflation at the cost of economic growth, several sectors of
the Indian economy are poised for a gradual slowdown. Apart from
the adverse impact on revenue growth, the inflationary effect on
cost of inputs would have a negative impact on margins. The Company’s
diversified user industry base and increasing geographical expansion
is however expected to help mitigate the impact of these adverse
trends. Further, the Company is also undertaking several cost reduction
efforts to protect margins.
About the Murugappa Group
Headquartered in Chennai, the Rs.9582 Crore (USD 2.4 billion) Murugappa
Group is India’s leading business conglomerate. Market leaders
in diverse areas of business including Engineering, Abrasives, Finance,
General Insurance, Cycles, Sugar, Farm Inputs, Fertilizers, Sanitaryware,
Plantations, Bio-products and Nutraceuticals, its 29 registered
companies have manufacturing facilities spread across 13 states
in India. The organisation fosters an environment of professionalism
and has a workforce of over 32,000 employees.
The Group has forged strong joint venture alliances
with leading international companies like DBS Bank, Mitsui Sumitomo,
Cargill, Roca and Groupe Chimique Tunisien has consolidated its
status as one of the fastest growing diversified business houses
in India.
For further information, please contact:
Chandrika Raman
Asst General Manager -
Group Corporate Communications
Murugappa Group CUMI
Tel: 044 25306535 / 98400 71172
Email: chandrikaR@corp.murugappa.com
V Ramesh
Chief Financial Officer
Group Corporate Communications
Murugappa Group CUMI
Tel: 044 42216132 / 99400 57663
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