Hit hard by higher cost and lower sales volumes, the South-based India Cements (ICL) on Wednesday reported a net loss of `218 crore for the fourth quarter of FY23 as compared to loss of Rs 24 crore in the corresponding quarter of last fiscal.
The company also had a write off of one-time impairment of certain investments and advances to the tune of `114 crore which added to the loss. The revenue of the company grew to ` 1,460 crore as compared to `1,392 crore registering a growth of around 5%.
The company’s performance was adversely impacted by the increase in the cost of fuel and power and by one off impairment charges,” said vice chairman and MD, N Srinivasan.
According to him, the cost per Kcal of fuel increased from around Rs 1.85 to Rs 2.90 and average rate of power from `5.20 per KWH to `7.04 per KWH.
“These two major factors together with reduction in blended cement proportion increased the cost of production by more than `840 per tonne, while net plant realisation improved hardly by Rs.208 per tonne resulting in substantial erosion of the margins,” he said.
Srinivasan said that ICL had a basket of plants of various vintage and technology with varying operating parameters and hence the cost of production compared with many of the peers were higher.
ICL had hired consultants to refurbish the plants. The consultants have submitted their reports and it was being evaluated.
As of March 2023, the cement major has a total outstanding debt of `2,900 crore and it plans to repay `500 crore during this fiscal.
Going forward, ICL plans to improve the liquidity in the short term by disposing of about 600 acres of land in Tirunelveli in Tamil Nadu.
The company will be utilising the part of the proceeds from the monetisation to repay the debt and some money will be set aside for working capital requirement.
“We are in difficult times and sources were a constraint. With the completion of monetisation, we will be in a much better position,” he said.
On the outlook for FY24, he said that the company expects a better performance. “With increased sales, we will achieve breakeven next quarter. This is without any price rise, ” he said.