HEIDELBERG CEMENT 2018-19 Annual Report Analysis

Sun, 31 Mar

HEIDELBERG CEMENT has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

HEIDELBERG CEMENT Income Statement Analysis

• Operating income during the year rose 17.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 33.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.7% in FY19 as against 20.0% in FY18.
• Depreciation charges increased by 0.6% and finance costs increased by 0.4% YoY, respectively.
• Other income grew by 74.7% YoY.
• Net profit for the year grew by 65.7% YoY.
• Net profit margins during the year grew from 7.3% in FY18 to 10.3% in FY19.

HEIDELBERG CEMENT Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	18,170	21,334	17.4%
Other income	Rs m	199	348	74.7%
Total Revenues	Rs m	18,369	21,682	18.0%
Gross profit	Rs m	3,634	4,833	33.0%
Depreciation	Rs m	1,012	1,018	0.6%
Interest	Rs m	745	748	0.4%
Profit before tax	Rs m	2,077	3,416	64.5%
Tax	Rs m	745	1,210	62.4%
Profit after tax	Rs m	1,332	2,207	65.7%
Gross profit margin	%	20.0	22.7
Effective tax rate	%	35.9	35.4
Net profit margin	%	7.3	10.3

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HEIDELBERG CEMENT Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 9 billion as compared to Rs 9 billion in FY18, thereby witnessing an increase of 6.5%.
• Long-term debt down at Rs 4 billion as compared to Rs 5 billion during FY18, a fall of 16.5%.
• Current assets rose 34% and stood at Rs 9 billion, while fixed assets fell 3% and stood at Rs 18 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 27 billion as against Rs 25 billion during FY18, thereby witnessing a growth of 6%.

HEIDELBERG CEMENT Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	10,464	11,712	11.9
Current Liabilities	Rs m	8,575	9,133	6.5
Long-term Debt	Rs m	4,692	3,918	-16.5
Total Liabilities	Rs m	25,328	26,955	6.4
Current assets	Rs m	6,608	8,874	34.3
Fixed Assets	Rs m	18,720	18,081	-3.4
Total Assets	Rs m	25,328	26,955	6.4

HEIDELBERG CEMENT Cash Flow Statement Analysis

• HEIDELBERG CEMENT's cash flow from operating activities (CFO) during FY19 stood at Rs 4 billion, an improvement of 4.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -263 million, an improvement of 92.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 1 billion from the Rs 2 billion net cash flows seen during FY18.

HEIDELBERG CEMENT Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	3,771	3,931	4.2%
Cash Flow from Investing Activities	Rs m	-137	-263	-
Cash Flow from Financing Activities	Rs m	-1,655	-2,419	-
Net Cash Flow	Rs m	1,980	1,249	-36.9%

Current Valuations for HEIDELBERG CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.7, an improvement from the EPS of Rs 5.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 180.9, stands at 18.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 10.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	80.2	94.1
TTM Earnings per share	Rs	5.9	9.7
Diluted earnings per share	Rs	5.9	9.7
Price to Cash Flow	x	13.8	10.8
TTM P/E ratio	x	24.2	18.6
Price / Book Value ratio	x	3.2	3.0
Market Cap	Rs m	33,907	34,683
Dividends per share (Unadj.)	Rs	2.5	4.0

Ratio Analysis for HEIDELBERG CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY19, from 0.8x during FY18. 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 5.6x during FY19, from 3.8x during FY18. 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 18.8% during FY19, from 12.7% during FY19. 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 26.6% during FY19, from 18.6% during FY18. 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 11.0% during FY19, from 8.2% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	0.8	1.0
Debtors’ Days	Days	4	4
Interest coverage	x	3.8	5.6
Debt to equity ratio	x	0.4	0.3
Return on assets	%	8.2	11.0
Return on equity	%	12.7	18.8
Return on capital employed	%	18.6	26.6

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 142.3 to Rs 180.9, registering a gain of Rs 38.6 or around 27.1%.

Overall, the S&P BSE SENSEX is up 16.3% 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