India Cements logs Q1 loss of Rs 75 crore, to modernise and monetise assets
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Closing the first quarter of FY24 with a net loss of Rs 75.27 crore, cement major India Cements Ltd looks at monetisation of non-core assets, cutting down variable production costs and refurbishing its old plants, a top company official said.
Speaking to reporters, Vice Chairman and Managing Director N.Srinivasan noted that the company requires about Rs 400 crore (Rs 250 crore for capital expenditure and Rs 150 crore for working capital) and about Rs100 crore will be raised in two weeks towards working capital.
For the remaining funds, India Cements will monetise its non-core assets.
The cement sales for the quarter under review was only 26.57 lakh tons as compared to 27.85 lakhs tons in the previous quarter.
The low sales was only due to the liquidity crunch faced by the company consequent to lower margins and losses.
During the first quarter of the current fiscal, India Cements logged an operational revenue of Rs 1,393.04 crore (against Q1FY23's Rs 1,446.23 crore) and a net loss of Rs 75.27 crore (net profit of Rs.76.09 crore).
The company has engaged the services of consultants to conduct detailed study of the operating parameters of plants for refurbishment/modernisation to bring them in line with that of state of art modern plants. The company has engaged Boston Consulting Group to study the operations at three of its plants in Andhra Pradesh and suggest measures for improving efficiency in operations of these plants.
According to India Cements, it has been improving its performance progressively over the last four quarters. The variable cost has been reducing over the period. There has been a reduction of Rs 168 per ton in variable cost during the quarter under review as opposed to the last quarter of previous year.
Nevertheless, the variable cost continues to be high for the company as compared to the peers and the company has initiated necessary action to address the same. The new cement mill at Sankar Nagar in Tamil Nadu replacing old in-efficient cement mills, is likely to be commissioned by the second quarter of the current fiscal.
