Chennai: The Board of Directors met today and approved the results for the quarter ended 31^st December 2010.

Consolidated Q 3 financial performance

Consolidated Net Sales grew by 25% to Rs.408 Crores from Rs.327 Crores. Growth was largely driven by abrasives, which grew by 62%. Ceramics registered a growth rate of around 11%. About 53% of Company’s consolidated sales continue to accrue from exports & overseas operations.

EBITDA (excl other / exceptional income) grew by 20% from Rs.62 Crores to Rs.74 Crores. PBIT grew by 22% from Rs.51 Crores to Rs.62 Crores.

Profit before tax was Rs.55 Crores – an increase of 23% over the previous year figure of Rs.45 Crores. Consequently profit after tax grew by 56% to Rs.37 Crores (previous year Rs.24 Crores).

Consolidated YTD Financial Performance

Consolidated Net Sales during the 9 months of 2010-11 were at Rs.1168 Crores (26% growth over the same period for previous year). Profits after tax (including exceptional item of income of Rs.18 Crores  post tax) was Rs.121.4 Crores as against Rs.69.3 Crores for the previous year.

Consolidated Operating Performance

Abrasives

CUMI’s consolidated abrasives sales registered an increase of 62% for the quarter. Sales for the quarter were Rs.185 Crores (Rs.114 Crores for the corresponding period of last year). The strong growth, particularly in the Indian and Russian markets, made this possible.

CUMI Standalone abrasives registered a growth of 25% in sales driven by the buoyancy in the Indian markets. Both bonded abrasives and coated abrasives witnessed double growth rates. Strong off-take was witnessed for non standard products, both from the dealer segment and the direct customer segment. Presence in non urban markets was increased through intensified retail initiatives. The marketing efforts were complemented by strong support from the manufacturing teams. Efforts were continued to improve raw material consumption efficiencies.

Sterling Abrasives, which caters to certain select segments of the bonded abrasives market, registered a 17% growth in sales. Wendt India, the joint venture, which addresses the super abrasives market, registered a 50% growth in sales.

In Russia, sales for the quarter went up by 91%. Growth was driven by improved off-take from auto, auto component and steel markets.

CUMI China registered a 42% sequential growth over Q2 of current year. Apart from servicing the requirements of thin wheels and other abrasive products for the Indian and Russian operations, the Company has made good progress in developing prospective customers in other overseas markets.

Both the North American subsidiaries viz. CUMI America and CUMI Canada staged smart recovery in sales following improved off-take from various customer segments.

Aided by the strong growth in turnover, control on fixed costs, initiatives taken to improve raw material consumption efficiencies and also price corrections done in the market, profitability (PBIT) of the abrasives segment witnessed a steep three fold growth i.e. from Rs.9 Crores to Rs.28.5 Crores.

Electro Minerals

Electrominerals maintained sales at about last year levels. Sales for the quarter were Rs.145 Crores (previous year Rs.146 Crores). The domestic and international market for all ranges of fused minerals was positive driving on the growth trend registered by the user industries.

Silicon carbide sales of Volzhsky Abrasive Works, Russia, recorded an increase of 17%. The growth in turnover was primarily a result of higher price realization. Despite this, the business not able to recover fully the steep increases in costs (Power & Pet Coke) leading to a drop in profits.

In India, the electro minerals business did well registering a growth of 34%. All three major product groups viz. silicon carbide, brown fused alumina, white fused alumina did well recording higher sales. The slowdown in supplies from China helped the business to get better price realizations across product range. Good demand from domestic refractory customers helped the white fused alumina segment. The photovoltaic segment continues to show promise with more projects getting into the pipeline in India.

In South Africa, sales of Foskor Zirconia were flat. Though demand for zirconia products was firm, the appreciation in the South African currency diminished competitiveness. Profitability of the business was eroded due to increased power and fixed costs and due to sales contracts in place at previous prices.

Profit before interest and tax of the consolidated electrominerals business, was Rs.23 Crores (previous year Rs.32 Crores).

Ceramics

The ceramics business recorded a 11% increase in sales (Rs.85 Crores vs. Rs.77 Crores).

In India, both the high alumina ceramics business and the super refractories businesses registered double digit growth rates. Off take from cement, material handling, mineral processing industries, iron and steel and carbon black industries was strong driving the top line for this business.

Sales of metalized cylinders registered a sequential growth of 20%. The commissioning of some balancing equipment was completed towards the end of the quarter which will yield benefits in terms of higher supply capability in the forthcoming quarters.

Exports of wear resistant tiles to the North America more than doubled. However sales to the Australian markets were dented due to stiff competition from Chinese products and also the floods in Australia.

The Company’s joint ventures, in the refractory business, viz. Murugappa Morgan Thermal Ceramics Ltd. and Ciria India Limited continued to perform well registering a 8% growth in turnover.

Profit before interest and tax of the Ceramics business segment, was lower at Rs.14.4 Crores (previous year Rs.17 Crores) primarily because of the drop in profitability of the Australian operations and also to some extent pricing pressures, increase in input costs, product mix issues in the Indian refractory business.