InvestorQ : Why did Heidelberg Cement also report a sharp fall in profits in the latest quarter?
Moii Chavate made post

Why did Heidelberg Cement also report a sharp fall in profits in the latest quarter?

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Tisha Malhotra answered.
1 month ago
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Cement companies are facing a problem of higher costs and Heidelberg has also been facing that problem in the current quarter. Firstly, let me talk about the top line performance for Q2FY23. For the September 2022 quarter, Heidelberg Cement reported -12.22% lower net sales at Rs506.05 crore. Due to weak seasonal demand, the sales volumes fell by -18.8% at 1.00 million tonnes even as prices remained flat to positive. Maharashtra Seamless distributed dividend of Rs9 per share for fiscal year FY21-22. The 18.8% fall in volumes in Q2FY23 was partially offset by an 8% rise in average price realization. Here is a gist.

Heidelberg Cement

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 506.05

₹ 576.47

-12.22%

₹ 589.89

-14.21%

Net Profit (Rs cr)

₹ 7.01

₹ 59.56

-88.23%

₹ 51.61

-86.42%

Diluted EPS (Rs)

₹ 0.31

₹ 2.63

₹ 2.28

Net Margins

1.39%

10.33%

8.75%

Let me now turn to your profitability question. For the September 2022 quarter, the profit after tax was down -88.2% at a meagre Rs7.01 crore. If you see on a per tonne basis, the the operating costs (especially, freight, power and fuel) increased by 23% yoy. This was triggered by a spike in petcoke, diesel and packaging costs. There was a fall of 50% in the EBITDA per tonne at Rs476. This resulted in the EBITDA margins compressing yoy from 20.2% to 9.4%. Net margin was 1.39% in Q2FY23 against 10.33% in Q2FY22 and 8.75% in the sequential June 2022 quarter. Lower debt resulted in improvement in coverage ratios.

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