HEIDELBERG CEMENT 2017-18 Annual Report Analysis

Sat, 31 Mar

HEIDELBERG CEMENT has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

HEIDELBERG CEMENT Income Statement Analysis

• Operating income during the year rose 26.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 30.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.0% in FY18 as against 19.5% in FY17.
• Depreciation charges increased by 2.0% and finance costs decreased by 17.1% YoY, respectively.
• Other income declined by 15.9% YoY.
• Net profit for the year grew by 74.8% YoY.
• Net profit margins during the year grew from 5.3% in FY17 to 7.3% in FY18.

HEIDELBERG CEMENT Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	14,331	18,170	26.8%
Other income	Rs m	237	199	-15.9%
Total Revenues	Rs m	14,568	18,369	26.1%
Gross profit	Rs m	2,789	3,634	30.3%
Depreciation	Rs m	992	1,012	2.0%
Interest	Rs m	898	745	-17.1%
Profit before tax	Rs m	1,136	2,077	82.8%
Tax	Rs m	374	745	99.1%
Profit after tax	Rs m	762	1,332	74.8%
Gross profit margin	%	19.5	20.0
Effective tax rate	%	32.9	35.9
Net profit margin	%	5.3	7.3

HEIDELBERG CEMENT Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 9 billion as compared to Rs 8 billion in FY17, thereby witnessing an increase of 14.1%.
• Long-term debt down at Rs 5 billion as compared to Rs 6 billion during FY17, a fall of 18.4%.
• Current assets rose 42% and stood at Rs 7 billion, while fixed assets fell 4% and stood at Rs 19 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 25 billion as against Rs 24 billion during FY17, thereby witnessing a growth of 5%.

HEIDELBERG CEMENT Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	9,670	10,464	8.2
Current Liabilities	Rs m	7,518	8,575	14.1
Long-term Debt	Rs m	5,752	4,692	-18.4
Total Liabilities	Rs m	24,076	25,328	5.2
Current assets	Rs m	4,659	6,608	41.8
Fixed Assets	Rs m	19,418	18,720	-3.6
Total Assets	Rs m	24,076	25,328	5.2

HEIDELBERG CEMENT Cash Flow Statement Analysis

• HEIDELBERG CEMENT's cash flow from operating activities (CFO) during FY18 stood at Rs 4 billion, an improvement of 4.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -137 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion, an improvement of 47% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 2 billion from the Rs 64 million net cash flows seen during FY17.

HEIDELBERG CEMENT Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	3,614	3,771	4.4%
Cash Flow from Investing Activities	Rs m	-402	-137	-
Cash Flow from Financing Activities	Rs m	-3,147	-1,655	-
Net Cash Flow	Rs m	64	1,980	2,979.0%

Current Valuations for HEIDELBERG CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.9, an improvement from the EPS of Rs 3.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 142.3, stands at 24.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 14.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	63.2	80.2
TTM Earnings per share	Rs	3.4	5.9
Diluted earnings per share	Rs	3.4	5.9
Price to Cash Flow	x	16.1	14.5
TTM P/E ratio	x	46.2	24.2
Price / Book Value ratio	x	2.7	3.2
Market Cap	Rs m	26,287	33,907
Dividends per share (Unadj.)	Rs	2.0	2.5

Ratio Analysis for HEIDELBERG CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY18, from 0.6x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 3.8x during FY18, from 2.3x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 12.7% during FY18, from 7.9% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 18.6% during FY18, from 13.2% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 8.2% during FY18, from 6.9% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.6	0.8
Debtors’ Days	Days	3	4
Interest coverage	x	2.3	3.8
Debt to equity ratio	x	0.6	0.4
Return on assets	%	6.9	8.2
Return on equity	%	7.9	12.7
Return on capital employed	%	13.2	18.6

To see how HEIDELBERG CEMENT has performed over the last 5 years, please visit here.

HEIDELBERG CEMENT Share Price Performance

Over the last one year, HEIDELBERG CEMENT share price has moved up from Rs 124.7 to Rs 142.3, registering a gain of Rs 17.6 or around 14.1%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for HEIDELBERG CEMENT and quarterly results for HEIDELBERG CEMENT)

Read: Latest Annual Report Analysis of HEIDELBERG CEMENT