The India Cements Ltd, a cement maker, announced a standalone net loss of Rs 217.79 crore for the fourth quarter ended March 31, 2023. The firm blamed the record rise in fuel and electricity prices for the loss.
The firm, which is situated in the city, reported a standalone net loss of Rs 23.71 crore for the same quarter a year ago on Wednesday.
The standalone net loss for the fiscal year ended March 31, 2023, was Rs 188.55 crore compared to a net profit of Rs 38.88 crore.
According to the firm, “the fourth quarter results are generally not comparable as it includes all the provisions for write-offs and investment impairment.”
India Cements had a standalone net profit of Rs 76.09 crore as of June 30, 2022, a net loss of Rs 137.58 crore as of September 30, 2022, a rebound quarter with a net profit of Rs 90.73 crore as of December 31, 2022, a net loss of Rs 217.79 in the fourth quarter, and a net loss of Rs 188.55 crore for the fiscal year ending March 31, 2023.
According to a corporate official, “the third quarter was profitable because we made Rs 294 crore in asset sales during that quarter, and as a result, the net loss for the year decreased due to those profits.”
When compared to the same quarter previous year, the standalone total revenue increased to Rs 1,478.89 crore from Rs 1,396.72 crore.
The standalone total income increased from Rs 4,729.83 crore to Rs 5,415.08 crore for the fiscal year ended March 31, 2023.
N Srinivasan, vice-chairman and managing director of the company, reported the financial results for the three months and the year ending March 31, 2023. He said the performance of the company during the year under review was negatively impacted due to a record increase in the cost of fuel and power, which could not be made up in the market due to supply overhang.
“One-time costs for the impairment of certain investments and advances added to this. The profit from the selling of investments somewhat offset this. The results for the quarter and year ending March 31, 2023, was poor as a result of all these problems, he said.
According to Srinivasan, the effect on production costs was brought on by a sharp rise in the cost of coal, fuel, pet coke, and electricity, all of which were substantially greater for the firm than for many of its competitors.
According to him, the margins were pressured by the uncompensated cost rise due to reduced blended cement output due to market mix and lower capacity utilisation of manufacturing facilities at 63% for the year.
He said that during the reviewed year, the price of gasoline per kilocalorie rose from around Rs 1.85 in the prior year to Rs 2.90 in the present year, and the average price of electricity grew from Rs 5.20 per KWH to Rs 7.04 per KWH, a rise of 35%.
According to him, “these two major factors, along with a decrease in the blended cement proportion, increased the cost of production by more than Rs 840 per tonne while net plant realisation improved hardly by Rs 200 per tonne, resulting in substantial erosion of margins.”
Through the sale of investments in Madhya Pradesh, the company took action to increase liquidity, which in the short term helped increase capacity utilisation to roughly 72% in the fourth quarter of the previous financial year as opposed to 60% registered in the prior year, he said.