THE INDIA CEMENTS LIMITED UNAUDITED RESULTS FOR THE III QUARTER ENDED 31 ST DECEMBER 2018

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    The severe competition in the south for market share for cement due to supply overhang had its toll on the operating performance of the units in the south affecting through aberration in cement prices. Even within south, the stability of the prices varied from state to state depending upon the concentration of the units in the region. This drop in net plant realisation was compounded by the steep increase in the prices of fuel and petroleum products together with the depreciation of rupee against dollar. The primary market of Tamil Nadu was also affected with the cyclone “Gaja” devastating some of the districts during the month of November’18. All these factors had a telling impact on the bottom line of the industry in south. However, the silver line being the price of fuel, have started to ease which will have its favourable impact in the coming quarters.
    The uptrend in cement production continued during the quarter also with the industry registering an increased output of 14% in the April to December’18 period as per the information published by DIPP. As per information available, it is inferred that the growth in south could also be higher by more than 20% but the primary growth in south is driven by the infrastructural demands from the governments of Andhra Pradesh and Telengana at relatively lower prices. While supply to this significantly improved the overall sales, It could not contribute for improvement in net plant realisation nor reduction in variable cost as most of the supplies were by way of Ordinary Portland cement. Being a lean quarter, the company also took the opportunity to take up some of the maintenance works resulting in increased drawal of clinker and cement together with its additional impact on cost. However, the company could achieve significant savings in freight and handling expenses in the face of substantial increase in the price of diesel through series of measures. The performance of the company has to be viewed against this back drop of low cement prices and increased cost of production.
    Company Performance:
    The capacity utilisation of the company during the quarter under review was 76% as compared to 70% in the same quarter of the previous year.
    The cement sales was at 29.38 lakh tons registering a growth of 8% as compared to 27.26 lakh tons and alongwith a clinker sale of 0.2 lakh tons, the overall volume was at 29.58 lakh tons for the quarter.
    The NPR was marginally lower when compared with II quarter on a sequential basis while it was maintained on Q on Q basis.
    The variable cost had gone up by nearly 9% on year on year basis and by 1% as compared to the quarter on sequential basis.
    This reduction in NPR, together with increase in input cost had resulted in a lower EBIDTA of Rs.139 crores for the quarter as compared to Rs.171 crores in the same quarter of the previous year.
    The interest and other charges were lower at Rs.73 crores as compared to Rs.92 crores and depreciation was at Rs.63 crores same as that of previous year. The resultant profit before tax was at Rs.3 crores as against a profit of Rs.15 crores before tax in the same quarter of the previous year.

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