HEIDELBERG CEMENT 2022-23 Annual Report Analysis

Wed, 4 Oct

HEIDELBERG CEMENT has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

HEIDELBERG CEMENT Income Statement Analysis

• Operating income during the year fell 2.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 42.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.1% in FY23 as against 18.9% in FY22.
• Depreciation charges increased by 0.2% and finance costs increased by 26.4% YoY, respectively.
• Other income declined by 7.7% YoY.
• Net profit for the year declined by 60.7% YoY.
• Net profit margins during the year declined from 11.0% in FY22 to 4.4% in FY23.

HEIDELBERG CEMENT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	22,970	22,381	-2.6%
Other income	Rs m	491	453	-7.7%
Total Revenues	Rs m	23,460	22,834	-2.7%
Gross profit	Rs m	4,346	2,489	-42.7%
Depreciation	Rs m	1,121	1,123	0.2%
Interest	Rs m	364	461	26.4%
Profit before tax	Rs m	3,351	1,358	-59.5%
Tax	Rs m	829	366	-55.8%
Profit after tax	Rs m	2,523	992	-60.7%
Gross profit margin	%	18.9	11.1
Effective tax rate	%	24.7	27.0
Net profit margin	%	11.0	4.4

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HEIDELBERG CEMENT Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 9 billion as compared to Rs 8 billion in FY22, thereby witnessing an increase of 1.6%.
• Long-term debt down at Rs 1 billion as compared to Rs 2 billion during FY22, a fall of 29.2%.
• Current assets fell 6% and stood at Rs 11 billion, while fixed assets fell 5% and stood at Rs 16 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 27 billion as against Rs 28 billion during FY22, thereby witnessing a fall of 6%.

HEIDELBERG CEMENT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	15,652	14,614	-6.6
Current Liabilities	Rs m	8,366	8,500	1.6
Long-term Debt	Rs m	1,566	1,108	-29.2
Total Liabilities	Rs m	28,238	26,647	-5.6
Current assets	Rs m	11,842	11,128	-6.0
Fixed Assets	Rs m	16,396	15,519	-5.4
Total Assets	Rs m	28,238	26,647	-5.6

HEIDELBERG CEMENT Cash Flow Statement Analysis

• HEIDELBERG CEMENT's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -3 billion, an improvement of 19% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 1 billion from the Rs -613 million net cash flows seen during FY22.

HEIDELBERG CEMENT Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	3,019	2,261	-25.1%
Cash Flow from Investing Activities	Rs m	-350	1,444	-
Cash Flow from Financing Activities	Rs m	-3,282	-2,665	-
Net Cash Flow	Rs m	-613	1,040	-

Current Valuations for HEIDELBERG CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.4, an decline from the EPS of Rs 11.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 187.5, stands at 42.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 20.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	101.4	98.8
TTM Earnings per share	Rs	11.1	4.4
Diluted earnings per share	Rs	11.1	4.4
Price to Cash Flow	x	11.8	20.7
TTM P/E ratio	x	17.0	42.5
Price / Book Value ratio	x	3.4	3.0
Market Cap	Rs m	52,518	43,680
Dividends per share (Unadj.)	Rs	9.0	7.0

Ratio Analysis for HEIDELBERG CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY23, from 1.4x during FY22. 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 deteriorated and stood at 3.9x during FY23, from 10.2x during FY22. 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 declined and down at 6.8% during FY23, from 16.1% during FY23. 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 declined and down at 11.6% during FY23, from 21.6% during FY22. 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 declined and down at 5.5% during FY23, from 10.2% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.4	1.3
Debtors’ Days	Days	6	5
Interest coverage	x	10.2	3.9
Debt to equity ratio	x	0.1	0.1
Return on assets	%	10.2	5.5
Return on equity	%	16.1	6.8
Return on capital employed	%	21.6	11.6

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 down from Rs 190.5 to Rs 187.5, registering a loss of Rs 3.0 or around 1.5%.

Overall, the S&P BSE SENSEX is up 15.6% over the year.

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