India: Birla sees 8% drop in 3Q income

India: Birla sees 8% drop in 3Q income
09 February 2017

Birla Corp reported a saw its net profit fall from INR139.9m (US$2.09m) in 3QFY15-16 to INR20.9m in 3QFY16-17.

The company attributed the decrease to higher borrowing costs on account of the company’s acquisition of Reliance Cement Co and the reduction of treasury income as internal accruals were used to fund the purchase.

Total income shrunk by 8.07 per cent to INR8489m in October-December 2016 from INR9234.7m in 3QFY15-16.

Cement dispatches were down 11 per cent at 1.747Mt YoY. "Shortage of currency took a major toll on rural consumption that constitutes bulk of channel-trade sales. Construction activities in large projects were impaired by an embargo on sand and aggregates mining in large parts of the state," the company release stated. In addidtion, the ensuing state elections led to new projects being postponed or put on hold and the low demand resulted in a downward pressure on prices with competition intensifying.

However, despite the drop in revenues, EBITDA was nearly flat YoY at INR579.6m as operational efficiency was improved and running costs such as power and fuel were reduced.

Published under Cement News