The India Cements has reported net consolidated loss after tax of Rs 121 crore in the second quarter of the financial year 2022. It had recorded profit after tax of Rs 32.52 crore in the corresponding quarter of the previous fiscal, the company said in a BSE filing.
The cost per kcal of fuel went up from around Rs 1.60 per kcal in the same quarter of the previous year to as high as Rs.3.26 per kcal and the average rate of power moved up by more than Rs.2 per unit resulting in increase in cost of production by more than Rs 1,300 per ton during the quarter while increase in NPR was only Rs.390 per ton resulting in a negative EBIDTA of Rs 87 crore for the quarter ended September 30, 2022 as compared to Rs 137 crores of EBIDTA in the corresponding quarter in the previous year,” the company said in a media release.
The company’s net consolidated income stood at Rs 1,337.70 crore in Q2 FY23, a growth of from Rs 1,241.44 crore it recorded in the similar quarter last year.
“The performance during the quarter was significantly impacted due to spiralling increase in the price of input materials resulting in higher cost which could not be compensated in the market due to huge supply overhang. This was compounded by the loss of volume as some of the markets were not commercially viable due to high cost of production. All these factors adversely affected the profitability with the company recording the largest loss in a quarter,” the company said in a media release.
It is to be noted that the company has a basket of plants of various vintage and technology with varying operating parameters of power and fuel and hence the impact of cost of production on account of coal price, diesel, etc. was much higher as compared to some of the peers. This was also compounded by the fact that the blended cement proportion came down in the overall mix with more demand for OPC for infra activities, roads and metro rail in the south. With a lower capacity utilization of around 60% only alongwith uncompensated cost increase, impact on the bottom line was severe. The company as a prudent policy withdrew despatches to east and far east markets and low contributing areas of Maharashtra during this quarter. All contributed for a lower growth as compared to peers, it said in the release.
The overall volume of clinker and cement for the company was at 22.54 lakh tons for the quarter as compared to 23.60 lakh tons year-on-year. For the half year ended September 30, 2022, the overall volume was up by 17% at 49.26 lakh tons as compared to 43.05 lakh tons in the previous year.
On October 10, 2022, the company signed a share-purchase agreement (SPA) for sale of Springway Mining to JSW Cement for which it will receive in total Rs 603 crore comprising consideration towards sale of investment and repayment of the debt. This will give the company much needed financial support.