India Cements has reported a net consolidated loss after tax of Rs 121 crore in the second quarter of the financial year 2022. It had recorded a profit after tax of Rs 32.52 crore in the corresponding quarter of the previous fiscal.
The cost per kcal of fuel went up from around Rs 1.60 per kcl in the same quarter of kcal in the same quarter of the previous year to as high as Rs 3.26 per kcl and the average rate of power moved up by more than Rs 2 per unit resulting in an increase in the cost of production by more than Rs 1,300 per ton during the quarter while an 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’s consolidated income stood at Rs 1,337.70 crore in Q2 FY 23 a growth of from Rs 1.241.44 crore it recorded in a similar quarter last year.
The performance during the quarter was significantly impacted due to a spiraling increase in the price of input materials resulting in higher costs that could not be compensated in the market due to a huge supply overhang. This was compounded by the volume as some of the markets were not commercially viable due to the high cost of production. All these factors adversely affected the profitability with the company recording the largest loss in a quarter, the company said.
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 the cost of production on account of coal prices, diesel, etc was much higher as compared to the same of peers. This was 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 utilisation of around 60% only along with an uncompensated cost increase, the impact on the bottom line was severe. The company as a prudent policy withdrew dispatches 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.
The overall volume of the clinker and cement of the company was 22.54 lakh tons for the quarter as compared to 23. 60 lakh tons year-on-year. For the half year that ended September 30, 2022, the overall volume was up by 17% at 49.26 lakh ton as compared to 43.05 lakh tons in the previous year.
On October 10, 2022, the company signed a share purchase agreement (SPA) for the sale of Springway Mining to JSW Cement for which it will receive in total of Rs 603 crore comprising consideration towards the sale of investment and repayment of the debt. This will give the company much-needed financial support.
