GROWING TOGETHER STAYING AHEAD
Every once in a while a truly global event occurs altering the traditional paradigmof life and living. It also brings to the fore the collective human ingenuity not only totranscend existential challenges but also to thrive in a new normal. At J.K. Cement wehave always emphasised the importance of growing together to stay ahead of the curve. Thestrong and vibrant stakeholder ecosystem we have built over the years strengthens ourresilience and provides a strong foundation to propel the next phase of our growth journeyand co-create a shared future.
STRONG ALL-ROUND PERFORMANCE IN
A CHALLENGING YEAR
I am pleased to share that J.K. Cement delivered another year of strong growth andprofitability in FY 2019-20 amid an already challenging external environment that wasfurther dampened by the COVID-19 pandemic. A slowing domestic economy delayedinfrastructure spending and pandemic-induced disruptions in the fourth quarter impactedcement demand. Considering the high correlation of cement demand with the domesticeconomy our performance demonstrates our robust fundamentals driven by resourceefficiency expanded capacities growing prominence across urban and rural markets andenhanced reach.
We achieved growth of 10% in revenue from operations to Rs 5464 Crores in FY 2019-20(from Rs 4981 Crores in FY 2018-19). Our EBIDTA increased 40% to Rs 1201 Crores in FY2019-20 (from Rs 855 Crores in FY 2018-19) while EBIDTA margin improved to 21.98% in2019-20 (17.16% in FY 2018-19). EBIDTA/tonne rose 41% to Rs 1256 in FY 2019-20 from Rs888 in FY 2018-19. Net profit increased 23% to Rs 400 Crores in FY 2019-20 (from Rs 325Crores in FY 2018-19). Our earnings per share stood at Rs 51.82 in FY 2019-20. The Boardrecommended an interim dividend of Rs 7.50 per share in February 2020 which was treated asfinal dividend in the meeting held in June 2020.
At J.K. Cement we have always emphasised the importance of growing together to stayahead of the curve.
EXPANSION PLANS LARGELY ON TRACK
During the year under review we made significant progress in our expansion plans. Wecommissioned the 2.6 MnTPA clinker production line at Mangrol (Rajasthan) and 3.5 MnTPAcement grinding capacity out of which Nimbahera (1 MnTPA) Mangrol (1 MnTPA) and splitgrinding unit at Aligarh (1.5 MnTPA). Work at split grinding unit at Balasinor (Gujarat)of 0.7 MnTPA had to be stopped for some time due to the nationwide lockdown to contain theCOVID-19 spread. We now expected the unit to come on stream in third quarter of FY2020-21.
We undertook the modernisation of line number 3 at our Nimbahera plant which isexpected to complete by the end of financial year. The 3-Lac-Tonne wall putty expansionwork at Katni has also been deferred due to disruptions caused by the pandemic and islikely to be commissioned by the end of the second quarter of FY 2020-21.
DELIVERING ON BRAND PROMISE
We continued on our product innovation path by launching two new products. Manufacturedthrough a technology developed inhouse Particle level Water (PWRT) JK Super StrongWeather Shield Cement has an integral water repellent property at the particle level. JKCement TileMaxX is our polymer-modified high strength adhesive used for all types oftiles tiles on tiles and cementitious substrates. To expand and strengthen our sub-brandsunder the white cement portfolio we re-launched our iconic JK Wall Putty as JK CementWallMaxX - with the stated promise of making the walls of your home Rs the ultimatemasterpiece.'
SUSTAINABILITY AGENDA GAINS FURTHER TRACTION
At J.K. Cement we work relentlessly to improve resource efficiency in clinker andcement production processes by optimising energy usage utilising generated waste andtargeting higher alternative fuel and raw material usage. We enhanced our focus onenvironmental protection energy efficiency and emission reduction. We are constantlyinvesting in research and development initiatives to limit the use of natural resources ingrey cement manufacturing and increase the share of additives like fly ash and slag in theproduction process.
COMBATING A GLOBAL HEALTH MENACE TOGETHER
As a responsible corporate citizen we have always believed in giving back to thesociety especially during the hour of extreme need. Our team across plants and the HeadOffice came together to stand by the nation in its fight against the pandemic. Over 2500employees contributed a day's salary to the PM CARES Fund.
In addition we extended our support to the local communities by providing food andshelter as well as by distributing personal protective equipment to frontline healthworkers.
Timely payments were ensured for our contractual workers.
We constantly engaged with our people through various communication modes to spreadawareness about the precautionary measures that must be undertaken to keep COVID-19 atPay.
Additionally we are developing and supporting the communities in which we operate. Wecontinue to focus on making a meaningful difference to their lives through well-structuredinitiatives in education community hygiene infrastructure development livelihoodsupport and vocational training and skill development.
GREAT PEOPLE CONVERGE AT GREAT WORKPLACE
Our people provide us a competitive edge and are the key catalysts in our journey ofprogress. We foster a high-performance culture and supportive workplace where opendialogue is encouraged thereby enabling employees to realise their full potential andcreating growth opportunities. We strive to provide a conducive environment for continuousinnovation and improvements by adopting a meritocratic rewards and recognition programme.
Our belief that great employees make a great workplace and efforts to provide the bestexperience to our people got its due recognition through the prestigious Rs Great Place toWork' certification. We thank each and every employee for their invaluable contribution inshaping our organisational culture.
A SALUTE TO THE GRIT AND DETERMINATION OF CONSTRUCTION WORKERS
Recently we launched the #YehPuccaHai campaign as our tribute to construction workers.Through the film we chronicle the journey of a construction labourer and his son whosedreams and desires are shaped by the surroundings. It vividly narrates the power of hardwork sacrifices and determination in overcoming odds to build a safe nation.
The long-term domestic demand outlook for cement remains buoyant and any weakness islikely to be transient. With the government's renewed push on infrastructure developmentand construction cement demand is likely to return to its normal growth trajectoryespecially aided by the rural market where the pandemic seems to have had a limitedimpact. We are well positioned to further cement our market leadership and capitalise onemerging opportunities; and we seek the support and guidance of all our stakeholders infuture endeavours.
Managing Director DIN - 00050364 Dated - 17th June 2020