The company has declared a net profit of Rs 1.53 crore for the third quarter of 1998-99 compared to Rs 4.89 crore achieved in the corresponding period of the previous year. The profit for the nine-month period ended December 31, 1998 is however still higher at Rs 41.34 crore as against Rs 26.58 crore in the previous period.

Net sales increased marginally by about two per cent to Rs 113.50 crore (Rs 111.65 crore). But cement sales in quantity terms was 6.17 lakh tonnes (5.45 lakh tonnes), an increase of 13 per cent which clearly indicates sharp fall in realisations.

During the period prices in south fell sharply reversing the excellent performance posted by the cement companies in the second quarter, thanks to their efficient price management. The thirdquarter saw the collapsing of that apparatus and cement majors entered into a `volume war' thereby pushing the prices down. On an average price per bag in south during the third quarter was lower by Rs 20.

Another reason for the sharp fall in company's net profit was its policy of writing off fully the advertisement expenditure incurred by it to promote its blended cement brand `Ramco Super Grade'. The company has spent as much as Rs 6 crore on building the brand during the quarter and the entire amount has been written off, according to senior company officials.

These resulted in the operating profit of the company declining to Rs 30.44 crore (Rs 36.40 crore). As a percentage of sales the operating profit was lower at 26.82 per cent (32.60 per cent).

Interest was lower at Rs 18.00 crore (Rs 20.51 crore) basically on account of certain pre-payments to financial institutions. But the figure would have been much lower had the company not drawn its working capital facility, which it did not during thefirst seven months. The tight market condition forced the company to utilise its cash credit facility and this increased the interest cost. This clearly reflects that the companies are not in a position to realise cash quickly for the cement sold.

A depreciation of Rs 10.91 crore (Rs 11.00 crore) has been made. Income from wind mills was higher this year at Rs 2.37 crore (Rs 1.33 crore) due to favourable wind conditions.