Highlights
- The revenue of the company during the quarter ended December 2008 increased by 15.2% to Rs 79.86 crore as compared to the corresponding quarter of the previous year.
- However during the quarter the company witnessed significant increase in power & fuel cost as well as the freight cost. The power & fuel cost increased by 170% over the corresponding quarter last year whereas the freight cost increased by 31% to Rs 5.62 crore.
- The average coal prices were Rs 3,200 per metric tonnes during the quarter under review and the company has significant imported coal inventory.
- The net profit of the company during the quarter under review however declined 40% to Rs 5.37 crore as compared to the corresponding quarter of the previous year.
- The company has completed the expansion of its capacity from 0.60 million metric tonnes to 2.35 million metric tonnes at its plant in Mattampally in Nalgonda District, Andhra Pradesh.
- Thus the company’s existing capacity has increased to 2.1 million metric tonnes of clinker with 2.5 million metric tonnes of cement grinding capacity.
- For the nine month period ended December 2008 the revenue increased to Rs 180.39 crore as compared to Rs 183.45 crore during the corresponding quarter of the previous year. The company during this period however posted a bottom-line of Rs 9.59 crore.
- The company produced 1,00,585 metric tonnes of OPC cement during the quarter ended December 2008.
- The sales of clinker during the previous quarter increased by 25% to 85,000 metric tonnes, whereas that of cement increased by 5.3% to 1,58,000 metric tonnes.
- The company is sitting on huge clinker inventory due to delay in commissioning of grinding unit. Thus the company has been selling clinkers as well during the quarter under review.
- Thus the value sales of clinker increased by 31% to Rs 24.79 crore during the quarter ended December 2008 and the cement sales increased by 12% to Rs 62.46 crore.
- The realization of cement was Rs 3,953 per metric tonnes during the quarter ended December 2008 as compared to Rs 3,738 per metric tonnes during the same period last year.
- The clinker realization improved to Rs 2,933 per metric tonnes as compared to Rs 2,768 per metric tonnes during the same period last year.
- The company produced 40% blended cement whereas 60% production was OPC cement.
- Apart from catering to markets in Andhra Pradesh, Orissa, Tamil Nadu and Karnataka, the company has embarked into markets of Maharashtra and Andaman & Nicobar, which will augment sales going forward.
- Overall, close to one-third of the dispatches are now to the markets outside the state of Andhra Pradesh.
- Also, as coal inventory gets exhausted going ahead, the Company will be able to take advantage of low coal cost. This is also expected to trim down the total production cost.
- The demand has remained healthy and the company does not expect any slow down in demand in the immediate term due to delay in commissioning of earlier announced capacities by various players.
- The proposed extension of the railway line passing through the plant is running as scheduled. The company expects to access farther markets at low freight cost through this initiative. The rail line extension would be complete by September 2009.
- The company’s JV with Vicat Group of France, viz- Vicat Sagar Cement to set-up a 5.5 million metric tonnes Cement capacity in Gulbarga, Karnataka is progressing as planned. The company has invested Rs 15 crores of equity in the JV so far.
- The plant will be set up at a total estimated cost of Rs 25 billion. The facility will have a 5.5 million metric tonnes of cement grinding unit and a 4 million metric tonnes clinkerization unit.
- It would also have a 60 MW power plant for captive use. The company also has sufficient limestone reserves at its disposal.
- The company has completed the tendering process for the equipment for Karnataka plant and as soon as the company gets the environment clearance it will place the order for the equipments.
- Financial quotes for the equipment will start coming in from the end of the current month and the environment clearance would be received by April 2009.
- This JV will have 2:1 debt-equity ratio and the company has 49% stake in it.
- The line –1 of the project would be completed by early 2012 and the line-2 would be commissioned by later 2013.
- The company would close the current financial year with a total production of 0.75 million metric tonnes of cement. However the production would significantly increase to 2.25 million metric tonnes during the next fiscal.