Orient Cement today reported a net loss of Rs 13 crore for the quarter ended December 31, 2015, mainly due to finance and depreciation costs related to a new plant in Karnataka.
The CK Birla group company had a profit of Rs 31 crore in the October-December quarter of the previous fiscal.
"As this is the first quarter in which the new Greenfield plant in District Gulbarga (Karnataka) has been operational, the company has booked finance costs and depreciation on this new investment of around Rs 2,000 crore, resulting in a net loss of Rs 13 crore," the company said in a statement.
The statement said the company has reported volume growth of 2.2 per cent YoY and net sales of Rs 351 crore.
The firm had reported a net sales of Rs 383 crore in the corresponding quarter a year-ago.
About the new facility it said, "The new capacity is still under stabilisation, but is already breaking even at the EBITDA level and is expected to achieve cash break-even in the coming months."
The new capacity gives the company access to new markets in Karnataka besides strengthening its position in Telangana, Andhra Pradesh and Maharashtra.
Deepak Khetrapal, Managing Director and Chief Executive Officer, Orient Cement said, "The quarter ended December 31 has seen a continuation of the challenging market conditions from the previous quarter. Our volume growth of 2.2 per cent versus the same quarter last year has coincided with a very low price environment in our core markets, especially in Maharashtra."
He said the costs related to the commissioning of new integrated unit at Chittarpur have affected operating and net profit numbers in this quarter.
"The Company expects, along with the rest of the Industry, for demand to pick up in the coming months. Various projects for housing, roads, irrigation, metros as well as new initiatives like 'Smart Cities' & 'Swachh Bharat' should lead to improved demand for cement in Telangana, AP and Maharashtra", he said.
Shares of the company closed at Rs 142.70, down 0.90 per cent from previous close on the BSE.
