The Ramco Cements reported a 43 per cent drop in its net profit at ₹110 crore for the first quarter ended June 30, 2020 when compared with ₹192 crore in the year-ago period.

The profitability in Q1 was impacted due to Covid-19. EBITDA has come down by 27 per cent during the first quarter of this fiscal due to drop in sale volume. Operating profit stood at ₹270 crore as against ₹367 crore in FY18.

Revenue of the company was down to ₹1052 crore from ₹1392 crore, on the back of 28 per cent fall in cement sales at 19.37 lakh tonnes (27.03 lakh tonnes in Q1FY20).

The company’s sale was disrupted by the nationwide lockdown imposed by the government due to Covid-19. However, better prices helped to some extent.

“The company has posted decent numbers despite difficult market conditions. In the coming months, we will focus on cost reductions in a significant way and we hope to better than Q1 in the coming quarters. Rural demand continues to be good,” A V Dharmakrishnan, Chief Executive Officer, Ramco Cements, told BusinessLine .

Now, the construction activities in all the project sites have started picking up. However, the sustenance of construction activities is key to complete the projects within the revised timeline especially in the wake of prevailing uncertainties.

“There was a concern about progress on our capacity expansion. Now the migrant labours are coming back and we hope to complete some of the projects by early 2021,” said Dharmakrishnan.

The progress of ongoing capex programme has been delayed due to Covid-19. The company has incurred ₹257 crore during the quarter ended June 30 towards total capex including the ongoing capacity expansion programme. The balance capex to be incurred is ₹1,180 crore for the ongoing capacity expansion.

In Q1, the company reduced the borrowings by ₹180 crore with tightening of its working capital after incurring above-mentioned capex of ₹257 crore. The company’s gross debt as on June 30 was ₹2,844 crore.

Related Topics
comment COMMENT NOW