Ramco Cements Ltd reported a 55% year-on-year decline in net profit to Rs.35.5 crore for Q1 ending June 30, 2024, down from Rs.79 crore in the same quarter last year.
The company's revenue from operations decreased by 6.8% to Rs.2,088.4 crore, compared to Rs.2,241 crore in the same period last year.
At the operating level, EBITDA fell by 6.4% to Rs.319.5 crore in Q1 of this fiscal year, down from Rs.341.4 crore in the same quarter last year.
In the reporting quarter, Ramco Cements' EBITDA margin was 15.3%, a slight increase from 15.23% in the first quarter of the previous fiscal year (FY24). EBITDA, which stands for Earnings Before Interest, Tax, Depreciation, and Amortization, measures a company's operating performance by focusing on earnings generated from core operations before accounting for non-operational expenses and accounting adjustments. This margin indicates a stable operating performance despite the decline in absolute EBITDA.
In the first quarter of FY25, the sale volume of cement reached 4.36 million tonnes (MT), marking a slight increase from the 4.30 MT recorded in the same period of FY24. This represents a marginal growth of 1%, which can be primarily attributed to weak demand conditions influenced by the general elections.
Despite this, the cement capacity utilization for Q1 FY25 stood at 77%, indicating a relatively efficient use of production capacity given the prevailing market conditions. This level of capacity utilization reflects the industry's ability to maintain operations and manage production effectively, even in times of subdued demand.
During Q1 FY25, the net revenue decreased by 7% to Rs.2,097 crore compared to Rs.2,249 crore in Q1 FY24 due to an approximately 8% decline in cement prices. The blended EBITDA per tonne for Q1 FY25 was recorded at Rs.752 as opposed to Rs.812 during the same period last year (Q1 FY24). Operating ratios remained constant at 16%, reflecting no significant changes between both quarters.
Due to inflationary effects on procurement costs, the cost of raw materials for the current year has risen from Rs.911 per tonne to Rs.990 per tonne, reflecting an increase of 9% YoY.
In Q1 FY25, the average fuel consumption per tonne of cement was priced at $137 (with a cost per Kcal: Rs.1.49), while in Q1 FY24 it stood at $170 (costing Rs.2.03/Kcal). As for power and fuel expenses, they decreased to Rs.1300/tonne during Q1FY25 from their previous value of Rs.1758/tonne recorded in the same quarter last year.
The shift to using wind power for captive purposes has reduced overall power costs, increasing green power usage from 29% in Q1 FY24 to 33% in Q1 FY25.
Ramco Cements aims to reach a cement capacity of 30 MTPA by March 2026 through a new line in Kolimigundla, optimizing current facilities, and expanding grinding capacities with minimal capital expenditure.
Following the results, Ramco Cements' shares closed at ₹800.20, up by ₹11.65 or 1.48%, on the BSE.
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