Prism Johnson posts bigger-than-expected Q2 loss on tepid cement demand

Indian construction materials maker Prism Johnson on Wednesday posted a bigger-than-expected quarterly loss, as cement prices persistently declined and demand remained tepid.

The company's consolidated net loss stood at 897.9 million rupees ($10.6 million) in the three months ended Sept. 30, marking a second straight quarter of losses. Prism Johnson had reported a net profit of 1.83 billion rupees a year ago.

The reported loss is also bigger than the analysts' estimates of a 122.8 million rupee loss, as per data compiled by LSEG.

Average cement prices slumped to a 51-month low around July-end and the first half of August, and only rose marginally in the later part of the quarter, Elara Capital said in a note.

 

Prices for the overall quarter declined 7 per cent year-on-year, the brokerage added.

Demand in the reported quarter was also largely muted as the industry, already hit by an election-linked slowdown in construction activity in the June quarter, did not see any improvement due to above-average rainfall in the country.

The company's net sales dropped 5.2 per cent to 16.39 billion rupees, owing to a 17 per cent decline in its cement business, which makes up 37 per cent of the revenue.

Prism Johnson's other two businesses - tiles and concrete mix - posted a 1 per cent and 0.4 per cent drop in revenues in their respective segment.

The company's shares, which were in the red ahead of results, fell 2.5 per cent post results.

India's top cement maker, UltraTech Cement, missed second-quarter profit estimates on lower prices and bleak demand.