With unabating buoyancy in cement demand, India Cements stayed itself firmly in the high profit zone. It posted a record net profit of Rs 79.78 crore in the third quarter ending December 31, 2006, up by 11 times over Rs 7.22 crore in the same period last year. Net sales increased to Rs 542.21 crore ( Rs 411.87 crore).
In the first nine months of this year, net profit surged to Rs 309.69 crore ( Rs 18.28 crore). With this, the company has wiped out the entire accumulated loss of Rs 262.53 crore which it had as on March 31, 2006. Net sales touched Rs 1694.7 crore ( Rs 1330.48 crore).
ICL Vice Chairman and MD, N Srinivasan told media persons on Monday, " With our variable costs remaining constant and our plants operating at full capacity, we transferred the entire price realisation to the bottom line. I am in a position to look at declaring a dividend for this year".
On the outlook, he said, " with supply constraints, we expect the cement price to go up in the country and south in February-March. Cement will not be available not less than Rs 200 per bag".
He said this fiscal will be the most profitable year for all the cement companies and they will report the highest profit next financial year. While the 10% demand growth at the all India level is expected to be sustained, it is expected to continue with 11.8% in the south. With limited growth in clinker production, cement companies meeting the demand with increased blended cement ( by mixing fly ash).
For ICL, gross realisation in Q3 came to Rs 3099 per tonne against Rs 2440 in the same quarter last year. It was Rs 3117 in the previous quarter of this year and Rs 3020 in Q1. In the first nine months, it worked out to Rs 3078 against Rs 2400 in the same period in 2005-06.
In the first nine months, the company had no tax liability but only a fringe tax tax provision of Rs 1.18 crore ( Rs 1.76 crore). He said its long term debt now stands at Rs 1000 crore which is less than its equity.
Asked about the plans for tax shelter this year, he declined to comment on the possible merger of subsidiary, Visaka cement ( which has losses). " Our tax management is well in place" he said.
Referring to the talks in the market of ICL acquiring Panyam Cements, " We have no interest in the company. Our brownfield expansion to add two million tonnes will be ready by December this year. We are also working on the time table for implementing the new project in Himachal Pradesh".
Meanwhile, the waste heat recovery project at Vishnupuram unit in Andhra Pradesh has been registered as a clean development mechanism ( CDM) project by UNFCCC . This will enable the company to receive carbon credits for the generation done through the waste heat recovery generator.