India Cements has reported a 10 per cent drop in net profit for the fourth quarter ended March 31, 2009, compared with the corresponding period in the previous year.
The company has announced a dividend of Rs 2 (20 per cent) an equity share of Rs 10 for 2008-09.
According to the company’s Vice-Chairman and Managing Director, Mr N. Srinivasan, higher costs of raw material, fuel, depreciation charges and foreign exchange losses have contributed to the drop in profits during the year, despite better realisation from cement. Output and movement of cement was also hit due to the prevailing power shortage in Andhra Pradesh.
For the year ended March 31, 2009, India Cements Ltd has reported a 32 per cent drop in net profit over the previous year at Rs 432 crore (Rs 637.5 crore), while income grew 10 per cent to Rs 3,907.5 crore (Rs 3,567.98 crore).
Cement production was 91 lakh tonne (92 lakh tonne) with matching sales. Gross realisation from cement was up at Rs 4,116 a tonne (Rs 3,836).
India Cements has approved an enabling resolution to raise up to $100 million (Rs 480 crore) through issue of fresh equity or related instruments from the domestic or global markets to fund its projects and to repay debts. But the company would primarily look at internal accruals to fund the plans, he said.
The company’s debt stands at Rs 1,048 crore, apart from FCCB redemptions of Rs 380 crore that would be due in May 2011. During the year, the company retired debts of Rs 119 crore.
Capex planWith a capital expenditure of Rs 1,500 crore planned over the coming year, India Cement will address the issues that have handicapped it.
The projects include buying a captive coal mine in Indonesia, 100 MW of captive power and a 1.5-mt cement plant with 20 MW captive power in Rajasthan. This would take the cement production capacity to over 15 mt from close to 14 mt now.
India Cements has floated a subsidiary in Indonesia where it has identified a coal mine which is estimated to have a potential to deliver over 15-30 mt of coal.
The company needs about 1.2 mt of coal a year for cement production and power generation. It has completed the technical due diligence and was going through legal issues. It hopes to complete the acquisition in three-four months.
Captive power plantsThe company has also decided to set up over 100 MW of coal-based captive power plants with 50 MW in Sankarnagar (Tamil Nadu) and 50 MW, most likely in Vishnupuram (Andhra Pradesh). The power plants would come under Coromandel Electric, an associate company in the group.
India Cements needs over 170 MW, and it now has about 50-60 MW available. These arrangements for coal and power will give the company an assured supply and control on costs.
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