India Cements Ltd (ICL) registered a net loss of ₹5.37 crore for the third quarter ended December 31, 2019, compared with a net profit of ₹3.13 crore in the year-ago period, mainly due to weak demand in its key business regions and poor prices.

The company has slipped into red after a gap of nearly 19 quarters. “Pressures of falling prices combined with poor demand in the southern market impacted the performance during the quarter,” said N Srinivasan, Vice-Chairman and Managing Director.

While the cement industry had grown in the North, West and the East, it had reported a decline of 12 per cent in the South. The economic slowdown, combined with stalling of projects and deferment of infrastructure spending in southern States resulted in weak demand in the region.

“The performance of ICL has to be viewed against this background of low demand since four of our units are situated in the States of Andhra Pradesh and Telangana where the decline in growth was more pronounced and hence our performance was affected more than that of our peers,” he said.

The overall sales volume of clinker and cement reported a 10 per cent drop at 26.6 lakh tonnes (29.58 lakh tonnes).

Capacity utilisation stood at 69 per cent (76 per cent). Srinivasan said the company observed restraint in not selling the cement below certain prices.

Net plant realisation stood at ₹3,342 per tonne (₹3,308 per tonne), but down sequentially from ₹3,501 per tonne.

Total income was lower at ₹1,194 crore (₹1,248 crore). EBIDTA stood at ₹132 crore (₹139 crore). However, the company contained the overall cost at ₹1,204 crore (₹1,317 crore).

Infra projects

Srinivasan said there were improvements in the last couple of months and growth is expected to kick in due to the proposed implementation of infrastructure projects announced by the government.

The company’s board re-appointed Rupa Gurunath as a whole-time director for a period of five years.

 

 

comment COMMENT NOW