Ramco Cements Q4 pre-tax profit down 25% to Rs 185.21 cr on subdued prices

Ramco Cements has reported a 24.9 per cent drop in profit before tax (PBT), at Rs 185.21 crore during the quarter ended March 31, 2020, from Rs 246.66 crore a year ago. Revenue dropped 9.2 per cent to Rs 1,401.27 crore from Rs 1,543.47 crore during the same period last year.

The company said that in 2019-2020, its cement sales were up a marginal one per cent, at about 11.20 million tones, from 11.12 million tonnes in the previous year.

Cement prices were under pressure for most part of the year. Logistics costs have come down due to reduction in diesel prices and reduction in lead distances. Operating costs continue to remain under control in view of benign prices of fuels such as pet coke, coal and diesel during the year, said the management.

The average pet coke prices have dropped by 28 per cent during the year. The average coal prices have declined by nine per cent during the year. Diesel prices have dropped by four per cent during the year. Rupee depreciation has largely offset the fuel price benefits.

"The company has been constantly focussing on various cost reduction initiatives and improving productivity while maintaining highest quality standards. The company's marketing initiatives of right products for right applications have attained desired momentum. The company is taking continuous efforts to optimise the supply chain efficiency," the management said.

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Ramco stated that it would complete its ongoing capacity expansion at a cost of about Rs 1,380 crore. It will be partly funded via internal accruals and partly through borrowings. The company has incurred Rs.1,920 crore towards total capex including capacity expansion programme during the current year.

Projects include expansion of a grinding unit near Vizag, AP from 0.95 MTPA to 2 MTPA, which was commissioned in March, 2020. A new grinding unit in Haridaspur, Odisha with a capacity of 1 MTPA is expected to be commissioned in August 2020. Expansion of clinkering capacity at the Jayanthipuram, AP from 3 MTPA to 4.50 MTPA along with WHRS capacity of 27 Mw, is expected to be commissioned before March 2021.

New cement plant in Kolimigundla, Kurnool District, AP with a clinkering capacity of 2.25 MTPA and cement capacity of 1 MTPA is expected to be commissioned before March 2021. The proposed plant shall have facilities such as railway siding, WHRS of 12.15 Mw and an 18 Mw thermalpower plant.