2021-22 was a year of recovery from the lows of 2020-21 as the Indian economy came outof the strict nationwide lockdowns and curbs supported by a faster vaccination drive andeasing of mobility restrictions. However the year 2021-22 also posed several challengesthat affected business operations such as the second wave of Covid-19 that claimed manylives and disrupted operations for most businesses especially in the first quartersupply chain issues that impacted export business opportunities coal and energy crisisthat impacted profitability in the second half. Further rising geopolitical tensionsbetween Russia and Ukraine increased the already soaring fuel prices resulting in acascading effect on other input costs.
2021-22 performance review: Consolidated Financials (including rQBe)
During the year Prism Johnson's consolidated revenue grew by 12.9% to 6306 Croresmainly led by growth in revenue of
H & R Johnson (India) (HRJ) and Prism RMC divisions. However consolidated EBITDAmargin declined by 280 basis points to 8.3%. This was mainly due to decline in PrismCement's EBITDA led by steep rise in power and fuel costs while HRJ's EBITDA marginexpanded 190 basis points to 10.6%. Consolidated EBIDTA for 2021-22 stood at 523 Crores adecline of 15.9% over the previous year. As a result Net Profit after Tax andnon-controlling interest declined by 46.4% to 92 Crores in 2021-22.
During 2021-22 Prism Johnson further improved its working capital levels (cashconversion cycle) to 16 days and generated free cash flows (pre capex and investments) of462 Crores. Capex requirements were largely met through internal accruals and ConsolidatedNet Debt increased marginally from 1183 Crores in 2020-21 to 1186 Crores. Net Debt toEBITDA stood at 2.3x during 2021- 22. Return On Capital Employed was clocked in at 9.7%.
While Prism Cement's sales volume and profitability came under pressure for variousreasons HRJ delivered strong revenue growth led by increasing volume offtake coupled withhigher realisations. Prism RMC benefitted from strong order wins from the infrastructuresector. Let us consider some of the highlights of our financial performance in 2021-22:
prism Cement:Prism Cement revenues declined by 6.9% to 2408 Crores due to a 10.3%decline in cement and clinker sales volume to 5.22 mn tons. Premium products constituted29.0% of the total cement sales volume as compared to 27.7% during 2020-21. EBITDA per tondeclined from 962 in 2020-21 to 709.
HrJ: HRJ revenues grew by 21.2% to 2221 Crores with EBITDA margin expanding 190basis points to 10.6% in 2021-22. HRJ reported highest ever EBITDA of
235 Crores in 2021-22. Tiles sales volumes grew by 9.3% in 2021-22 to 53.1 mn m2despite 14.3% decline in exports volume. Tile capacity utilisation increased from 59% in2020-21 to 69% in 2021-22. prism rmC: Prism RMC revenues grew by 31.9% to 1198Crores with an EBITDA 9 Crores. rQBe: Gross written premium grew by 33% to 393Crores. RQBE reported a Net Loss after Tax of 95 Crores. RQBE remains well capitalisedwith a solvency ratio of 2.2x as against the regulatory requirement of at least 1.5x. AUMstood at 815 Crores as on March 31 2022.
Strong Sustainability Focus
Being a building materials company we have a mark on the environment and on ourcommunities. At Prism Johnson we strive to create sustainable value by meeting theconstruction and lifestyle needs of our customers through innovative building materialsand services. Our collective purpose is to foster growth and nurture stronginfrastructural developments in the country create a healthy and safe working environmentfor our people provide quality product and service offering to our customers and createshareholder value.
Our Company aims to minimise the impact of our operations and continues to take severalconcrete steps in the right direction for a sustainable future. Here are some of the keyhighlights of our ESG initiatives:
36.6% of Prism Cement's total power requirement was met through renewable sourcesnamely WHRS and solar power during 2021-22
Prism Cement reported a 13% reduction in energy intensity to 13139 TJ; emissions'intensity stood at 613 kg CO2 per ton of cementitious material in 2021- 22
Prism Cement consumed 136 litres of water per ton of cement produced a 20%reduction in water intensity in 2021-22
Over 135000 saplings were planted by Prism Cement in 2021-22
Prism Cement's Lost Time Injury Rate (LTIR) stood at 0.23
Concrete Steps towards the Future
We believe several measures taken by the Government of India along with increase ininfrastructure demand pick up in housing and commercial activities will boost the demandfor building materials in the medium term.
To cater to the strong medium term demand potential emanating from the growing demandfrom the infrastructure and housing sectors we crystallised capacity expansion plansduring 2021- 22. We announced our plan to set up a 2 MTPA greenfield cement grindingcapacity in Eastern Uttar Pradesh by December 2024 for a capex of approximately 500Crores. During 2021-22 our joint venture entities increased tile manufacturing capacityby ~4 mn m2 taking HRJ's total tile manufacturing capacity to ~64 mn m2. HRJ has furtherannounced its plan for a greenfield tile capacity expansion of 5.5 mn m2 at Panagarh WestBengal by
June 2023 for the capex of around 90 Crores (excluding land).
Going forward Prism Johnson will continue to work on aligning its product mix in linewith the actual demand (for example increase share of glazed vitrified tiles in the tilessales mix) and expand distribution network to achieve strong revenue growth in future. TheCompany continues to invest in innovation to cater to modern infrastructure and lifestyleneeds of our customers. We are prepared to leverage technology and build capability acrossall levels of the organisation so that we can add value to our customers. The Company willalso continue to take initiatives to achieve cost-competitiveness and report healthyprofit margins in the medium term.
With this we thank our shareholders for their continued trust and confidence in ourCompany. We are grateful to our employees distributors and other stakeholders for theirconstant and untiring support. We credit our growth to our employees' hard workcommitment and dedication which will continue to help us scale newer heights as theystand with us through every high and low.
|Warm Regards |
|vijay aggarwal |