Dalmia Bharat Limited announced its unaudited consolidated financial results for the quarter ended June 30, 2020. Despite the challenges posed by COVID, the company said in a press release that it once again has delivered a strong performance and achieved an EBITDA of Rs. 1675/T during this quarter.
The same is the highest ever EBITDA achieved by the company and is an outcome of a combination of price increases in our operating regions and our sustained sharp focus on cost optimization, both variable and fixed.
On volume front, the company witnessed volume de-growth of ~19% on YOY basis which was reasonably better than the overall cement industry average. The volume de-growth was only on account of complete lockdown in April and there being no production activity at all. However, after resumption of operations at end of April, there was an immediate pickup in cement demand from pending infra projects and Individual home building segment, especially in East India. The pick-up of demand in rural demand was stronger than that in the urban areas.
The company has witnessed favorable pricing environment in most of its operating markets in Q1, especially in Southern states. However, given that the next quarter will be impacted by monsoon, one can expect some weakness in prices in the next few months.
On the cost front, our Variable Cost moderated as the company’s new clinker line has started contributing clinker under trial run production and it did not have to purchase clinker from outside. Furthermore, Dalmia had utilized low cost Pet coke inventory during the quarter.
The company has also cut down on overheads expenses including advertisement, travel, and some administration related spends etc. during the quarter. With a continued effort to strengthen the balance sheet further and have a robust cash position, Dalmia has, during the quarter, repaid more than Rs.500 Cr of gross debt and its Net Debt to EBITDA ratio is now at 1.02x.
Key Highlights:
- Long Term Issuer rating assigned as ‘AA+’ by CRISIL
- Gross Debt Repayment of Rs. 508 cr during the quarter
- The expansion of grinding units in East has been impacted due to Covid-19 and part of the capacity is
expected to be completed by Dec’20. - Share buyback completed so far for 61.6 lac shares amounting to Rs. 328 Cr.