India Cements net profit declines

Company had clocked Rs 26 crore net profit during the October-December period of the last fiscal

 India Cements Ltd has posted a drop in net profit at Rs 0.42 crore for the quarter ended December 31, 2013, as against Rs 26.12 crore registered during the same period of previous fiscal year. The total income from operations experienced a decline during the quarter, at Rs 1,038.27 crore as compared to Rs 1,085.72 crore for the corresponding quarter of last year.

Despite the marginal increase in the sales realisation, the increase in cost push together with volume resulted in an EBIDTA of Rs 146 crore as compared to Rs 196 crore, during the same quarter a year ago. Foreign exchange translation difference resulted in a gain of Rs 3 crore against Rs 11 crore, a year ago.
 

 

N Srinivasan, vice chairman, India Cements said, that despite an increase in net plant realisation, which increased by over Rs 300, company has reported a drop since volume was lower due to sluggishness. He noted the company sold two lakh tonne less compared to what it sold in the second quarter.

 

In second quarter, the company sold 24.36 lakh tonne, which has come down to 22.37 lakh tonnes.

 

Interest charges were higher at Rs 80 crore as against Rs 71 crore in the previous year. While depreciation was marginally lower at Rs 69 core against Rs 71 crore.

The economic slowdown continue to affect the country resulting in slowing down the industrial activity with its severe impact on all the core sector industries.

 

The company quoting Ministry of Commerce and Industry, the cement demand grew only 1.1% in the month of December 2013 and around three% for nine months period.

 

"This weak growth in the demand exerted continuous pressure on selling prices of cement squeezing the margins of the industry in general".

The increase in input costs, revision in railway freight, power tariff revision and the increase in exchange rated coupled with monthly increase in the price of petroleum products resulted in the marginal performance of the company during the quarter.