Displaying items by tag: India
The Ramco Cements’ profit surges 55% on cost control
09 November 2015India: The Ramco Cements has reported a 55% jump in net profit for the second quarter of its 2016 fiscal year on the strength of performance efficiency and cost control.
The company has reported a net profit of US$20.9m, up from a US$13.5m profit in the same period of its 2015 fiscal year. Its total revenue fell to US$135m from US$144m in the same quarter of its 2015 fiscal year. Cement sales during the quarter fell to 1.71Mt from 1.94Mt.
CEO of The Ramco Cements AV Dharmakrishnan said that the investments in company infrastructure to strengthen its systems and processes, focus on cost control and debt reduction have contributed to the jump in net profit. These benefits will continue to accrue in the coming quarters.
JK Lakshmi Cement posts US$2.27m net loss for the second quarter of its 2016 fiscal year
06 November 2015India: JK Lakshmi Cement has posted a standalone net loss of US$2.27m for the second quarter of its 2016 fiscal year, which ended on 30 September 2015, down from US$4.66m in the same period of its 2015 fiscal year, due to an additional burden of interest and depreciation cost on commissioning of the new Durg cement plant. Its standalone income rose by 13% year-on-year to US$98.2m during the quarter. The company said that its sales volume and prices were both impacted by subdued market conditions.
Prism Cement acquires 50% stake in Coral Gold Tiles
06 November 2015India: Prism Cement has acquired a 50% stake in Coral Gold Tiles Pvt Ltd. It did not disclose the value of the deal. The acquisition will increase Prism Cement's tile business capacity to 58Mm2/yr from 54.5Mm2/yr.
JSW plans US$610m investment to expand port and cement capacity
06 November 2015India: JSW plans to invest US$610m to boost its port and cement capacity in the next two years. It plans to almost double its ability to handle cargo at its ports to 62Mt/yr, with a target to further increase it to 200Mt/yr by 2025, according to group CFO Seshagiri Rao. Cement capacity is estimated to increase to 17Mt/yr in the next 24 months from 6Mt/yr at present.
"Ports appear to be a very attractive investment as ports and inland waters have not at all been leveraged in India," said Rao to Bloomberg. "We feel that in each of the core infrastructure sectors there is a huge amount of change happening." Rao said that the group will build its own cement plants instead of acquiring an existing business.
Tricky times in India
04 November 2015The past week has seen several quarterly financial results from producers in the world's second-largest cement industry: India. So far, they do not make for a great read from an economic perspective, although some players, including Birla Group and Sanghi Cement are yet to show their hands.
So let's kick off. For the quarter that ended on 30 September 2015, LafargeHolcim subsidiary Ambuja Cements saw its net profit slide by 36% year-on-year to US$23.6m compared to the same period of 2014. Its income fell by 4% to US$324m as it battled a one-off charge. ACC, LafargeHolcim's other Indian subsidiary, saw a profit of US$17.5m for the quarter, a year-on-year fall of 40% compared to 2014. Not great for the global number one player.
Other players to announce so far have included JK Cements, which reported a 58% fall in consolidated net profit to US$2.1m. Meanwhile, Century Textiles, which owns Century Cement, fared even worse. It actually posted a loss compared to a marginal profit in 2014, despite an increase in total income.
It has not been all doom and gloom however. UltraTech Cement, while it reported a drop in profit, was not as badly affected as the firms listed above. It recorded a 3.9% fall to a net profit of US$59.7m for the quarter, down from US$62.3m in the same period of 2014. This was reported as being better than expected according to a senior research analyst at Angel Broking, perhaps hinting at shaky ground under even these results.
So far, the exception to the lower profits and losses has been India Cements Ltd (ICL), which posted an almost five-fold growth in its net profit. It profit grew from US$1.14m to US$6.26m, which it said stemmed mainly from improved operating parameters and substantial reductions in its variable costs. Its operating profit grew to US$35.4m from US$27.9m. It expects performance to improve as it increases its capacity utilisation rate up, currently languishing at just 60%.
Does the company provide a model for other producers to follow? Perhaps. The company's managing director and vice-chairman of ICL, N Srinivasan, said that the company was poised for improved conditions in its markets. In the company's results he said, "Going forward, we see better times ahead. We had a tough time for two years and have achieved a turnaround by cutting costs and maintaining a healthy cement price." The fact that ICL has managed to 'maintain a healthy cement price' in times of low requires scrutiny in a separate column.
However, a possible take-away from the results released so far is that the larger producers seem to have greater immunity to the problems surrounding over-supply in India. Economies-of-scale and the ability to spread risk around different Indian markets tends to favour larger players like UltraTech. Conversely, a smaller player that finds itself 'stuck' in one of the weaker regional markets, must just sit tight and weather the storm. Either that or it can make itself into a strategic acquisition target for one of the larger groups.
We are still awaiting results from other players in the Indian market, but with low demand, it would be foolish to expect them to be significantly different from the above. Given this, two key factors will help determine whether the decline in profits continues or not. Firstly, India's Modi government is promising large-scale infrastructure projects, which would help boost demand for cement. The industry has heard such promises in the past, however, and may chose to be skeptical. Secondly, it is important to remember that lower profits are being seen at the moment, even despite lower coal costs. Any upward change in these costs and the pace may become too fast for some of the country's smaller producers.
Prism Cement’s net loss grew to US$5.08m in the second quarter of its 2016 fiscal year
04 November 2015India: Prism Cement's standalone net loss widened to US$5.08m for the second quarter of its 2016 fiscal year, which ended on 30 September 2015, compared to a net loss of US$3.02m in the same period of 2014. During the period, its net sales grew by 4.56% to US$213m. Prism Cement sold 1.35Mt of cement and clinker compared to 1.29Mt during the same quarter of its 2015 fiscal year.
Prism Cement said that the short term scenario remains 'challenging,' however, government initiatives such as housing, 'smart cities' and the push to infrastructure aided by a stable inflation and rate cut bodes well for the medium and long term economic outlook.
Birla Corporation commissions cement blending unit in Uttar Pradesh
03 November 2015India: Birla Corporation has commissioned its 50,000t/yr cement blending unit in Raebareli, Uttar Pradesh. In August 2015 it agreed to acquire, either directly or through its wholly-owned subsidiary, Lafarge India's Jojobera and Sonadih cement businesses for US$763m.
The India Cements’ net profit grew almost five-fold in the second quarter of its 2016 fiscal year
03 November 2015India: The India Cements Limited (ICL) has posted a nearly five-fold growth in its net profit for the second quarter of its 2016 fiscal year, which ended on 30 September 2015.
Its net profit grew from US$1.14m to US$6.26m in the second quarter of its 2016 fiscal year. Growth mainly stemmed from improved operating parameters and substantial reductions in variable costs. Its operating profit grew to US$35.4m from US$27.9m. Cement capacity utilisation was at 60% and is expected to rise.
According to Managing Director and Vice-Chairman of ICL, N Srinivasan, the last three quarters have seen the company posting consistent profits, a development that Srinivasan said had resulted in the company seeing better times ahead. "We have remained on the profit track for three consecutive quarters. Going forward, we see better times ahead. We had a tough time for two years and have achieved a turnaround by cutting costs and maintaining a healthy cement price," said Srinivasan. "With expected the increase in cement demand in the southern states and Andhra Pradesh building its new capital city Amaravati, we hope that the company will do well in the coming years."
Kumar Mangalam Birla named Vice Chairman of Century Textiles
02 November 2015India: Kumar Mangalam Birla, Chairman of the US$40bn Aditya Birla Group, has been appointed as Vice Chairman of Century Textiles and Industries. KM Birla is grandson of 94-year-old BK Birla, who is the Chairman of Century Textiles. In BK Birla's absence, KM Birla was chairing the board meetings.
For the quarter that ended on 30 September 2015, Century Textiles posted a net loss of US$3.69m compared to a net profit of US$117,422 for the same quarter of 2014. Total income grew from US$262m in the 2014 quarter to US$299m in 2015.
India: JK Cements has reported a 58% fall in its consolidated net profit to US$2.09m for the quarter that ended on 30 September 2015. However, its total standalone income rose by 5% to US$133m. The company's total expenses grew to US$122m from US$11.7m.