India Cements has reported a significant drop in its net profit at ₹3.13 crore for the quarter ended December 31, 2018 when compared with ₹15.24 crore in the year-ago quarter, on the back of poor prices and cost pressures.
Revenues grew by eight per cent at ₹1,316 crore when compared with ₹1,213 crore on the back of increase in cement sales at 29.38 lakh tonnes during the December quarter as against 27.26 lakh tons in the year-ago quarter.
Net plant realisation (NPR) was marginally higher at ₹3,300 per tonne (₹3,290 per tonne in Q3 of previous fiscal). Also, the variable cost had gone up by about nine per cent when compared with the year-ago quarter. Hence, the EBIDTA was lower at ₹139 crore as against ₹171 crore.
“It was a challenging quarter. Amid a little increase in price realisations, our cost went up by about ₹200 per tonne. On a sequential basis too, prices were lower. Prices were challenging everywhere. We pulled back from many new markets and focussed on our core markets — South India and Maharashtra,” N Srinivasan, Vice Chairman & Managing Director of the company told reporters here.
Its sales grew 20 per cent in the south, while it was negative outside the south. The capacity utilisation of the company was 76 per cent as compared to 70 per cent a year-ago.
Srinivasan said the company is unlikely to reach near full capacity utilisation in Q4 as projected earlier.
Way forward
However, he expressed optimism over the outlook as prices started moving northwards from January, during which cement volume grew 15 per cent. Fuel prices (coal and pet coke) have started to soften.
“We are entering a busy season (February-September). With higher capacity utilisation, lower operating cost and better prices, our margins will be higher going forward. Q4 will be substantially better than Q3,” he said.