Ramco Cements Ltd., a leading manufacturer of cement in South India, reported a 34% decline in its first quarter standalone net profit due to sharp rise in fuel and input costs and weak cement prices.
The firm posted a 45% jump in revenue from operations to ₹1,749 crore.
Total expenditure increased by 65% to ₹1,626 crore, of which raw materials accounted for 47% (₹216 crore). The cost of electricity and fuel more than doubled to ₹524 crore, while transportation cost increased by 57% to ₹360 crore, a statement said.
The company sold 33 lakh tonnes of cement (21 lakh tonnes). Windfarms produced 7.71 crore units (7.01 crore units).
An average increase of 11% in diesel prices resulted in an increase in all in-bound/out-bound logistics costs. The average price of Pet Coke increased by 90%. The average price of imported coal for thermal power plants has also increased by 50%, the company said.
As fuel prices peaked in the first quarter, the power and fuel cost per tonne of cement rose sharply from ₹1,031 to ₹1,584. The company could not pass on the entire cost escalation due to the sharp increase in fuel prices to its customers.
However, operation of Waste Heat Recovery System (WHRS) at Jayanthipuram has helped in reducing the overall power and fuel cost to some extent.
Regarding expansion plans, the company said that the trial production at its Kurnool clinkering plant was successful and the unit was running well. With this, the clinkering capacity had gone up to 13.65 MTPA.
The cement grinding facility and 6 MW WHRS at Kurnool will be commissioned in August. This will take the installed capacity of cement to more than 20 MTPA. The remaining 6.15 MW of WHRS will be commissioned by 23 March. Limestone beneficiation plant will be commissioned in March along with modernization of RR Nagar plant.
The company also proposes to expand the capacity of its dry-mix product units in Tamil Nadu, Odisha and Andhra Pradesh to produce high-value products and other regular dry-mix products. Two units in TN will be commissioned in FY23 and the remaining two units in AP and Orissa by FY24.
During this period, the company spent ₹482 crore towards capital expenditure. As of June, the net debt stood at ₹4,148 crore, of which ₹450 crore is short-term 1oan.