The revenue from operations for Q2 FY23 was seen at Rs 1,264.39 crore, compared to Rs 1,327.06 crore year-on-year (Y-o-Y), registering a fall of 4.72 per cent. “Despite the continuous reduction in variable cost, the drop in net plant realisation for cement continued, resulting in lower margins and lower capacity utilisation. The performance of the company, hence, continued to be suboptimal with a negative bottom line,” the company said in a statement. Production and sale of cement were only marginally higher by 5 per cent as compared to the earlier year.
Overall volume for the quarter under review was 2.37 million tonnes, as compared to 2.254 million tonnes in the previous year. With the reduction in fuel price directly flowing to the bottom line, there was a positive Ebitda of Rs 14 crore as compared to a negative Ebitda of Rs 87 crore in the previous year. The fuel cost, which went up to a high of Rs 2.95 per Kcal in the third quarter of the previous year, came down to Rs 2.38 per Kcal in the first quarter of the current year and to Rs 2.04 in the second quarter.
“There was an increase in the fixed power demand charges, increase in salaries and wages, advertisement expenses and consultant expenses, which increased the fixed cost and partially offset the reduction in variable cost,” the statement added. The company on Wednesday said that it is continuing with the plans to sell non-core assets and has started recovering the advances given to group companies as part of augmenting its working capital needs.
Over the years, India Cements has given loans and advances to associate companies and subsidiaries like Coromandel Sugars (having its sugar plant in Karnataka) and India Cements Infrastructures. N Srinivasan, Vice-Chairman and managing director, India Cements, told the media that this year it has recovered about Rs 115 crore advances from group companies and expects to recall more for easing its liquidity position and meeting operational requirements. It needs Rs 250 to Rs 300 crore of working capital.
He said the company was looking at monetising the surplus land and it also succeeded in selling a portion of the land parcel in Andhra Pradesh. “We have found the sale of lands takes time due to various reasons. Therefore, we looked at other options and started recovering advances given to group companies.”
He said the company has been honouring its commitment on term loan repayment. During the second quarter, it repaid Rs 140 crore. This has reduced the outstanding debt to Rs 2,807 crore as on 30 September 2023 from Rs 2,947 crore as on 30 June 2023.