Business
India Cements' margins under pressure in H1
By Our Corporate Reporter
CHENNAI NOV. 30. Sluggish demand in its core markets and a steep fall in cement prices have affected the operating margins of India Cements in the quarter ended September 30, 2001.
Gross sales realisation has declined by 30 per cent to Rs. 2,234 a tonne in the second quarter from Rs. 2,805 a tonne in the first quarter, which was responsible for erosion of profitability of s. 79 crores between the quarters.
The operating profit has thus declined to Rs. 42.64 crores in the second quarter as compared to a profit of Rs. 88.97 crores in the same period in the previous year. This has resulted in a drop in operating profit at Rs. 131.61 crores in the six months ended September 30, 2001 against Rs. 154.36 crores in the corresponding six month period in 2000-01, Mr. N. Srinivasan, Chairman and Managing Director told presspersons while releasing the half yearly results here today.
The demand for cement in Tamil Nadu has grown by a mere 2 per cent. But the negative growth of 6 per cent in Kerala led to pressure on prices.
Additional supplies from new capacities in the region further deteriorated the price position, Mr. Srinivasan felt. The demand for cement continues to be sluggish during October and November, which is the normal pattern due to impact of monsoon in Tamil Nadu.
The turnover for the half year ended September 30, 2001 was lower at Rs. 664.22 crores against Rs. 722.27 crores.
After making a provision of Rs. 110.87 crores (Rs. 91.53 crores) towards interest charges and Rs. 39.99 crores (Rs. 37.63 crores) for depreciation, the company suffered a net loss of Rs. 19.25 crores in the current half year against a profit of Rs. 25.20 crores in the corresponding period in 2000-01.
Vishnu Cements, its group company, has achieved a net profit of Rs. 41 lakhs on a turnover of Rs. 64.22 crores in the current six months against a loss of Rs. 96 lakhs in the corresponding period last year.
By Our Corporate Reporter
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