Significant pick up in demand in the South during the final quarter and a big jump in net realisation help the company
Despite a negative demand growth in the South during the first nine months, The India Cements Ltd. (ICL) reported 19 per cent jump in its revenue at Rs.4,223 crore for the year ended March 31, 2012, up from Rs.3,540 crore in the preceding year.
The significant pick-up in cement demand in the South during the final quarter and a big jump in net realisation largely helped ICL post a healthy net profit of Rs.293 crore, up from Rs.68 crore in the preceding year.
Addressing a press conference, N. Srinivasan, Vice-Chairman and Managing Director, said, “I am also surprised at the demand pick-up in the final quarter.” From a minus 3 per cent growth during April-December, 2011, the demand in the South grew to 9.4 per cent in the fourth quarter of the just-concluded year.
He attributed this to pick-up in demand, especially in Andhra Pradesh. For the country as a whole, the demand grew at an impressive 10 per cent in the final quarter as against 5.6 per cent during the first three quarters. According to Mr. Srinivasan, ICL achieved a capacity use of 67 per cent during the year under review.
For the final quarter of 2011-12, ICL reported a turnover of Rs.1,123 crore (Rs.1,000 crore) and a profit before tax of Rs.94 crore (Rs.77 crore). The net profit stood at Rs.64.92 crore (Rs.55.28 crore).
Mr. Srinivsasan said the gross price realisation had gone up to Rs.4,777 (Rs.3,853) per tonne and the net price realisation to Rs.3,431 (Rs.2,661). But sales remained flat in terms of volume during the year. However, escalation in fuel and power costs had an impact.
“Higher price realisation absorbed the rise in cost sufficiently to improve the profits,” he pointed out.
Fielding a range of questions, he said the 50 MW power plant at Sankar Nagar had gone on stream towards the end of last financial year. He expected the power plant at Vishnupuram to go into production sometime in March next year. Once Vishnupuram plant went on stream, the power capacity of ICL would go up to 150 MW. The ICL's power needs would be around 180 MW, he pointed out. To a question, he said work “is on for the infrastructure creation for connecting ports and coal mines in Indonesia.” The maiden coal consignment from Indonesian mine would come in 3-6 months, a company official said.
While hoping that the pick-up in demand would continue in the current quarter as well, he expected the price to be maintained this year too. However, Mr. Srinivasan expressed concern over many a continuing imponderable, including the uncertainty on the exchange rate front.
Keywords: Indian cements annaul results