Conference Call with JK Cement Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full earnings transcript.

Call Participants: Mr. A K Saraogi - Executive Director and CFO, Mr. Prashant Seth - VP Commercial

Introductory Remarks from A K Saraogi

Good evening and welcome to Q4FY20 results and the annual results. The Board of Directors met on June 17 in an usual conference to review the performance of the company for the quarter ended March 2020 as well as to approve the results of the full year. Major highlights for the quarter:

• Revenue from operations was at Rs 1,477 crore as against Rs 1,492 crore, marginal drop of about 1% which was mainly due to less volumes in the month of March due to Covid-19

• The EBITDA during this quarter was Rs 346 crores as against Rs 279 crores, an increase of 24% 

• The Profit before exceptional items was Rs 258 crore as against Rs 211 crore, an increase of 22% 

• There was an impairment of Rs 178 crores for the Fujairah plant and the profit after exceptional items was Rs 80 crores as against Rs 211 crores and the profit after tax was a nominal Rs 23 lakhs against Rs 150 crores

• EPS during the quarter was at Rs 0.03 as against Rs 19.41 last year and the EBITDA margin during the quarter was 23.74% as against 19%, last year 

• The full year highlights: revenue from operations was at Rs 5,464 crores as against Rs 4,981 crores, an increase of 10%

• The EBITDA was Rs 1,181 crores as against Rs 810 crores, an increase of 46% 

• The profit before exceptional items was Rs 830 crores as against Rs 474 crores, an increase of Rs 75 crores. After touching impairment of Rs 78 crores, the profit was Rs 652 crores as against Rs 474 crores, an increase of 38% and the profit after tax Rs 400 crores as against Rs 325 crores, an increase of 23%

• EPS was Rs 51.82 as against Rs 45.28 and the EBITDA margin for the year was 21.89% as against 16.47%

• The Board has declared an interim dividend in the month of February of Rs 7.50 per share and decided that this may be treated as final dividend and no further dividend was considered by the board

• As regards the status of the expansion, the Mangrol expansion of 4.2 million tons out of which 3.5 million tons have already been commissioned and only the grinding unit at Balasinor of 0.7 million is yet to be commissioned. The work at Balasinor was stopped due to Covid-19. However, now the civil construction work has restarted and is expected by September-October the grinding unit at Balasinor to be commissioned

• For the expansion at Mangrol, we have spent about Rs 4,195 crore uptil now. We have also taken up Line 3 modernisation and work on that is also at an advanced stage and uptil March, out of our project cost of about Rs 400 crores, we have spent about Rs 140 crores and the work over here had also stopped but now we are gradually resuming the work and we expect that by December this year, we should be able to commission the Line 3 work

• During the month of May and April, sales started in the south and in the month of May sales started in the north. As of now, we have seen an upward trend of about Rs 10 a bag but we will have to see how going forward will be the position

• We have kept all other capex on hold. We will review the normal capex scheme where we have started work and done 50% of it and wouldn like to complete that work. But, that expenditure is not much and may be around Rs 40-50 crores

• On the Panna site, in the first stage, if we set up the plant, the capacity would be around 3-3.5 million and presently we are going ahead with the acquisition of the land where we have already acquired 80% of the land and remaining 20% is yet to be acquired which is in process. We expect that to be delayed because of Covid-19 but we expect that we will be able to procure that land within this year. We will first check Mangrol project and then how the Panna expansion is to be carried out.