Ramco Cements reports Q1 FY24 Profit Dip of 31.92 per cent
Cement

Ramco Cements reports Q1 FY24 Profit Dip of 31.92 per cent

The Ramco Cements has posted a 31.92 per cent decline in its consolidated net profit for the quarter ending on June 30, 2023. The company's after-tax profit reached Rs 743.6 million in Q1 FY24, down from Rs 1.09 billion recorded in the corresponding period of the previous fiscal year, according to a filing with the Bombay Stock Exchange (BSE).

In Q1 FY24, the company's consolidated total income reached Rs 22.53 billion, marking a growth of 26.23 per cent compared to Rs 17.85 billion in the same quarter of the previous year.

As of June 30, 2023, the company's net worth stood at Rs 69.43 billion. The debt-equity ratio was 0.65, the current liability ratio was 23 per cent, total debts to total assets ratio was 30 per cent, the operating margin stood at 16 per cent, and the net profit margin was 3 per cent. The net debt as of June 30, 2023, amounted to Rs 44.06 billion, out of which Rs 4.79 billion was allocated for working capital. The average cost of interest-bearing borrowings for Q1 FY24 increased to 7.95 per cent from 6.66 per cent in FY23.

During Q1 FY24, sales volume reached 4.30 million tons, a 29 per cent increase from 3.34 million tons in Q1 FY23. However, supply disruptions due to the non-availability of sand in Kerala, a rail accident in Orissa and West Bengal, and active monsoon conditions in the North East hindered further growth in sales volume during the current quarter. The cement capacity utilisation for Q1 FY24 was at 79 per cent.

Despite a four per cent average decrease in diesel prices during Q1 FY24, there was a marginal reduction in inbound and outbound logistics costs. In terms of fuel consumption, the blended fuel cost per ton for cement reached $170 (cost per Kcal: Rs 2.03) in Q1 FY24, compared to $157 (cost per Kcal: Rs 1.87) in Q1 FY23. After adjusting for inventory changes, the power and fuel cost per ton of cement for Q1 FY24 increased to Rs 1,669 from Rs 1,554 in Q1 FY23. The spot CIF prices for pet coke and 4200 GAR coal from Indonesia in July 2023 were $120 and $61, respectively. Despite a brief period of lower fuel prices in Q1 FY24, the elevated carrying value of fuel inventory maintained the power and fuel cost per ton of cement at a higher level. However, there is an expectation of a decrease in the coming quarters.

The utilisation of green power has notably improved from 19 per cent in Q1 FY23 to 29 per cent in Q1 FY24 due to the shift of wind power utility for captive purposes, aiming to reduce costs by Rs 70 to Rs 80 per ton in the upcoming quarters. The green power share is projected to reach 40 per cent for FY24.

Interest costs for Q1 FY24 reached Rs 930 million, up from Rs 470 million during Q1 FY23. The effective average borrowing cost for Q1 FY24 was 7.68 per cent, compared to 5.41 per cent in Q1 FY23. Depreciation for Q1 FY24 totaled Rs 1.48 billion, an increase from Rs 1.06 billion in Q1 FY23.

The Ramco Cements has posted a 31.92 per cent decline in its consolidated net profit for the quarter ending on June 30, 2023. The company's after-tax profit reached Rs 743.6 million in Q1 FY24, down from Rs 1.09 billion recorded in the corresponding period of the previous fiscal year, according to a filing with the Bombay Stock Exchange (BSE).In Q1 FY24, the company's consolidated total income reached Rs 22.53 billion, marking a growth of 26.23 per cent compared to Rs 17.85 billion in the same quarter of the previous year.As of June 30, 2023, the company's net worth stood at Rs 69.43 billion. The debt-equity ratio was 0.65, the current liability ratio was 23 per cent, total debts to total assets ratio was 30 per cent, the operating margin stood at 16 per cent, and the net profit margin was 3 per cent. The net debt as of June 30, 2023, amounted to Rs 44.06 billion, out of which Rs 4.79 billion was allocated for working capital. The average cost of interest-bearing borrowings for Q1 FY24 increased to 7.95 per cent from 6.66 per cent in FY23.During Q1 FY24, sales volume reached 4.30 million tons, a 29 per cent increase from 3.34 million tons in Q1 FY23. However, supply disruptions due to the non-availability of sand in Kerala, a rail accident in Orissa and West Bengal, and active monsoon conditions in the North East hindered further growth in sales volume during the current quarter. The cement capacity utilisation for Q1 FY24 was at 79 per cent.Despite a four per cent average decrease in diesel prices during Q1 FY24, there was a marginal reduction in inbound and outbound logistics costs. In terms of fuel consumption, the blended fuel cost per ton for cement reached $170 (cost per Kcal: Rs 2.03) in Q1 FY24, compared to $157 (cost per Kcal: Rs 1.87) in Q1 FY23. After adjusting for inventory changes, the power and fuel cost per ton of cement for Q1 FY24 increased to Rs 1,669 from Rs 1,554 in Q1 FY23. The spot CIF prices for pet coke and 4200 GAR coal from Indonesia in July 2023 were $120 and $61, respectively. Despite a brief period of lower fuel prices in Q1 FY24, the elevated carrying value of fuel inventory maintained the power and fuel cost per ton of cement at a higher level. However, there is an expectation of a decrease in the coming quarters.The utilisation of green power has notably improved from 19 per cent in Q1 FY23 to 29 per cent in Q1 FY24 due to the shift of wind power utility for captive purposes, aiming to reduce costs by Rs 70 to Rs 80 per ton in the upcoming quarters. The green power share is projected to reach 40 per cent for FY24.Interest costs for Q1 FY24 reached Rs 930 million, up from Rs 470 million during Q1 FY23. The effective average borrowing cost for Q1 FY24 was 7.68 per cent, compared to 5.41 per cent in Q1 FY23. Depreciation for Q1 FY24 totaled Rs 1.48 billion, an increase from Rs 1.06 billion in Q1 FY23.

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