India Cements has posted a net loss of Rs.22.53 crore for the quarter ended September 30, 2013, when compared with a net profit of Rs.49.08 crore a year-ago.
The company attributed the loss to weak demand for cement in the south on the back of a slump in industrial activity and lower selling prices.
With significant fall in price realisation, the EBIDTA (earnings before interest, depreciation, tax and amortisation) was lower at Rs.135.52 crore as against Rs.208.23 crore.
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Net plant realisation (NPR) fell to Rs.3,090 from Rs.3,529 a tonne, resulting in erosion of sales by Rs.107 crore. NPR fell sequentially too when compared with Rs.3,185 a tonne in Q1.
Net sales of the company for the second quarter stood at Rs.1,085.93 crore against Rs.1,122.67 crore.
``The huge capacity overhang and poor demand on account of a very low GDP growth has led to substantial drop in selling prices of cement. Demand was growing at higher single digit till two years ago. But now it has fallen to low single digit and in the south it is worse,” said N. Srinivsan, Vice-Chairman and Managing Director.
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Though the company reported loss in Q2, its performance was better given the tough market conditions with several factors mounting pressure on the cost front, he pointed out.
“In spite of pressure, we kept cost of production per tonne under control. We closed the gap in terms of EBITDA per tonne with competition,” he added.
While the company saw improvements in cement prices in October when compared with the July-September quarter, it is also attempting exports to improve capacity utilisation. It exported 12,000 tonnes to a neighbouring nation and intends to increase it to 20,000 tonnes a month.