Power, fuel cost per tonne of cement sharply increased from ₹1,057 per tonne to ₹2,013 during Q2
Power, fuel cost per tonne of cement sharply increased from ₹1,057 per tonne to ₹2,013 during Q2
Ramco Cements Ltd (RCL) reported a 98% fall in standalone net profit to ₹11 crore for the second quarter on account of increase in fuel cost and weak cement prices.
The cost per ton of mixed fuel consumption increased from $97 to $199. As aggregate fuel prices peaked during the financial year, the cost of electricity and fuel per tonne of cement rose sharply from ₹1,057 to ₹2,013 during Q2, a leading cement maker said in a statement.
RCL said that since its capabilities are concentrated in the south, it is not entitled to any tax incentives from any state government, unlike its peers who enjoy such privileges in other regions which are around ₹100 per tonne. Is. Further, RCL could not pass on the full cost escalation arising out of sharp fuel price hike to its consumers.
During the quarter under review, revenue from operations increased by 21% to ₹1,753 crore, input cost increased from ₹171 crore to ₹224 crore, while power and fuel grew 133% to ₹666 crore. Net profit for FY22 was higher than FY23 on account of deferred tax liability.
Cement sales during the second quarter rose 22 per cent to 3.31 million tonnes, while capacity utilization increased from 55% to 66%.
Any further jump in pet coke prices could adversely impact margins in the coming quarters. Frequent volatility in fuel prices, sharp depreciation of rupee and tighter interest rates are the troubling factors.
While the long-term outlook looks promising, the short-term outlook remains unclear due to geopolitical uncertainties.
During Q2, RCL incurred a capital expenditure of ₹504 crore. Its net debt is ₹4,741 crore, of which ₹724 crore is short-term debt.
Elaborating on the ongoing expansion programmes, RCL said that it proposes to double the grinding capacity of the Haridaspur plant in Odisha to 1.8 million tonnes per annum at a cost of ₹130 crore.