The India Cements Ltd (ICL) has posted its highest-ever loss of ₹137.58 crore for the second quarter ended September against a profit of ₹22 crore in the year-earlier period following rising input costs
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“Coal prices shot up from $60 to $300 per ton last quarter affecting cost of production directly, while the variable cost rose from ₹2,100 per ton to ₹3,600 per ton,” said said N. Srinivasan, vice chairman and MD. “The increase in cost could not be passed on to the customers.”
This was compounded by the loss of volume as some of the markets were not commercially viable due to high cost of production. Moreover, ICL plants operated during this period at lower capacity of 60% impacting the bottomline, he said.
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Revenue from operations grew by 5% to ₹1,255 crore. The overall volume of clinker and cement declined to 22.54 lakh tonnes from 23.60 lakh tonnes.
Mr. Srinivasan said ICL had a basket of plants of various vintage and technology with varying operating parameters of power and fuel and the impact of cost production due to coal price and diesel was much higher compared to some of the peers.
“When there was sudden sand bagging, we decided to sell our subsidiary Springway Mining Pvt. Ltd. to JSW Cement for ₹603 crore to address our liquidity position. We are in a better position now and FY24 will be much better,” he said.
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Adding further, he said that ICL has 26,000 acres of land – some precious and some non-precious. “If we want more money, we can monetise it. At this moment, what is monetised is sufficient. We will repay all our commitments,” he said.
On the outlook, he said that although, the overall cement demand is expected to be buoyant due to private sector house building and construction activity and the Centre and Southern States giving push to infrastructure projects, there is a substantial over capacity in the south waiting to be utilised.
While hinting at one more price hike, he said the company had stopped generating power due to hike in coal prices.
The industry in South is also still unable to assess the price situation and availability of thermal coal although some moderation is expected in price, he said.