)
India Cements vice chairman N Srinivasan today said he was cautiously optimistic of 2015 after witnessing a difficult year.
Addressing company’s shareholders today, he said operating profit last year was low due to lower volumes, while realisations were lower by Rs 200 a tonne. The company also had a one-time cost due to loss on sale of ship, fuel surcharge and others.
Srinivasan said there had been two items of non-recurring exceptional items of expenditure, including Right of Recompense paid to banks amounting to Rs 57.13 crore besides fuel surcharge adjustment towards electricity charges at Rs 69.43 crore.
“By and large, we lost price and volume, capacity utilisation, which in turn impacted the bottomline,” he said.
The industry also faced cost pressure due to “unprecedented” increase in exchange rate, revision in railway freight, power tariff revision, monthly dosage of increase in the price of petroleum products and increase in wages due to new settlement.
During the year, the company exited from the corporate debt restructuring (CDR) mechanism after paying the prescribed compensation.
According to him, capacity utilisation for the cement industry at the national level is 71-72 per cent, while it is 60 per cent in the south.
The overall cement production capacity currently stood at around 360 million tonne (mt), including 145 mt in the south.
On the outlook, he said, their had been a slight improvement, while the expectation was high from the new government. He hoped the New Year would see improvement in demand.
The company is also hoping fresh investments would flow into Andhra Pradesh and Telangana, pushing demand for cement in the south. India Cements has a major chunk of its capacity in these two states.
“We are geared up to meet the demand and have got enough capacity. We are cautiously optimistic about next year,” said Srinivasan.
He added the company was making better use of its 160-170-Mw power generation capacity . “We could save Rs 58 crore on power costs since we have captive power plant and did not buy power at high cost,” said Srinivasan.
On the CCI’s fine of Rs 187 crore, he said, “we will fight it legally. We did not do anything wrong, and it will be proved”.
In 2012, the Competition Commission of India (CCI) had imposed a combined penalty of more than Rs 6,300 crore against 14 cement companies, including India Cements, for allegedly colluding to keep prices high.
