J K Lakshmi Cement : Despite heavy rains, bottom line almost triples

JK Lakshmi Cement reported a 30% growth to Rs 163.21 crore in revenue in the quarter ended September 2006 despite heavy rains affecting the company’s despatches and production.
Operating profit margin (OPM) improved 760 basis points (bps) to 24.2% due to high cement prices. Realisation was Rs 2900 per tonne as compared with Rs 2200 per tonne in the September 2005 quarter — up 32%. Net profit surged 174% to Rs 23.37 crore.
In the half-year ended September 2006, net sales jumped 41% Rs 351.95 crore, and net profit 205% to Rs 62.22 crore.
JK Lakshmi Cement produced 6.21 lakh tonnes in the September 2006 quarter compared with 6.59 lakh tonnes in the September 2005 quarter — down 6%. The company reported despatches of 6.4 lakh tonnes compared with 6.86 lakh tonnes in the September 2005 quarter — down 7%. Production and despatches were adversely affected due to heavy rains in Rajasthan in August 2006, which impacted inward and outward movement of material. The company estimated despatches of one lakh tonnes were affected.
However, normalcy has since been restored and, hence, the adverse fallout is not expected to go beyond the September 2006 quarter. In the December 2006 quarter, J K Lakshmi Cement expects to produce a minimum 7.5 lakh tonnes
J K Lakshmi Cement will invest Rs 152 crore for a petcoke-based power plant, of which Rs 45 crore will be funded by internal accruals and equity.
The tax rate will remain under MAT for another five to six years as J K Lakshmi Cement has huge accumulated losses and depreciation. Limestone reserves are likely to last for the next 30-35 years.
J K Lakshmi Cement is to set up a 0.5 million-tonne grinding unit in Gujarat near the fly ash source. The unit is likely to commence in August-September 2007. The company’s current capacity is about three million tonnes. By December 2008, it will be increased to four million tonnes.