 "India Cements Q2 net drops 30% on high power rates")
Chennai: India Cements today said its net profit dropped by 29.5 percent to Rs 49.08 crore in July-September quarter due to rise in power tariffs and freight rates.
The Chennai-based company had reported net profit of Rs 69.71 crore during the same period of last year.
“We got slotted by power. Freight rates grew by 35 percent (affecting the company),” India Cements Vice-Chairman and Managing Director N Srinivasan told reporters here.
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Total income for the quarter rose to Rs 1,125.85 crore, from Rs 1,091.92 crore in the same period of last year. “Despite challenging operating environment for the cement companies in South, coupled with higher power tariff in Andhra Pradesh and Tamil Nadu and hefty power holiday of 12 days per month in Andhra Pradesh we were able to deliver a reasonable topline and bottomline numbers,” Srinivasan said.
To a query, he said the demand for cement was “better” in Tamil Nadu, Kerala and Karnataka respectively, while it was “poor” in Andhra Pradesh. Noting that the cement despatches has come down during second quarter of this financial year, he said, “Given the capacity overhang in the South, capacity utilisation may not increase sharply in the near term from current levels”.
On their upcoming cement manufacturing plant in Tamil Nadu, he said it would be commissioned in a month or two and added it would “supplement” to the existing overall capacity. According to Srinivasan, from its cement manufacturing plants, the company utilises 65 per cent of production.
He said the requirement of imported coal would go up “substantially” in the coming months as the company plans to commission its power plants in Tamil Nadu and in Andhra Pradesh. On the outlook for this financial year, he said the company was confident of posting a better performance in the coming quarters with the commencement of mining operations at the coal mines in Indonesia.
“We are expecting the first shipment shall take place during the next quarter which will bring down our fuel costs,” he said.
PTI