Power, fuel cost per tonne of cement sharply increased during Q2 to ₹2,013 from ₹1,057 per tonne
Power, fuel cost per tonne of cement sharply increased during Q2 to ₹2,013 from ₹1,057 per tonne
The Ramco Cements Ltd. (RCL) reported standalone net profit for the second quarter plummeted 98% to ₹11 crore on account of an increase in cost of fuel and weak cement prices.
Blended fuel consumption cost per tonne rose to $199 from $97. Since the overall fuel prices have peaked during the fiscal, power and fuel cost per tonne of cement sharply increased during Q2 to ₹2,013 from ₹1,057, said the leading cement manufacturer in a statement.
RCL said since its capacities are concentrated in South, it is not entitled to any tax incentives from any of the State governments unlike its peers who enjoy such privileges in other regions which is about ₹100 per tonne. Moreover, RCL could not pass on the full cost increase arising out of the sharp fuel price increase to its consumers.
During the quarter under review, revenue from operations rose by 21% to ₹1,753 crore, input cost increased from ₹171 crore to ₹224 crore, while power and fuel was up by 133% to ₹666 crore. Net profit for FY22 was higher than FY23 due to deferred tax liability.
During Q2, cement sales rose 22% to 3.31 million tonnes, while capacity utilisation improved to 66% from 55%.
Any further surge in pet coke prices could affect the margins adversely in coming quarters. The continuing volatility in fuel prices, faster rupee depreciation and hardening interest rates are bothering factors.
While the long term prospects look promising, the short term outlook remains unclear due to geo-political uncertainties, it said.
During Q2, RCL incurred a capex of ₹504 crore. It has a net debt ₹4,741 crore, of which ₹724 crore is short-term loan.
While detailing about the ongoing expansion programmes, RCL said it proposes to double the grinding capacity of Haridaspur plant at Odisha to 1.8 million tonnes per annum at a cost of ₹130 crore.
