New Delhi, February 03, 2016 – Orient Cement Limited, a part of the USD 1.6 billion diversified CK Birla Group, announced its financial results for the quarter ended December 31, 2015. The company has reported volume growth of 2.2% YoY and net sales of Rs. 351 Crore. As this is the first quarter in which the new Greenfield plant in District Gulbarga (Karnataka) has been operational, the company has booked finance costs and depreciation on this new investment of around Rs. 2,000 crore, resulting in a net loss of Rs. 13 crore, though at the operating level, the Company has registered a profit of Rs. 25.6 crores. The new capacity is still under stabilization, but is already breaking even at the EBITDA level and is expected to achieve cash break-even in the coming months. The new capacity gives the company access to new markets in Karnataka besides strengthening its position in Telangana, Andhra Pradesh and Maharashtra. As the new capacity stabilizes, it is expected to contribute to the company’s rapid growth and market reach.
Deepak Khetrapal, Managing Director and Chief Executive Officer, Orient Cement said, “The quarter ended December 31 has seen a continuation of the challenging market conditions from the previous quarter. Our volume growth of 2.2% versus the same quarter last year has coincided with a very low price environment in our core markets, especially in Maharashtra. Cement net sale realisations have been on average 5% lower than the last quarter and more than 10% lower than the same period last year.”
“Amidst these difficult external developments, we continue to do well on everything that is manageable – all our operating efficiencies and costs in our existing operations continue to get better, a result of our “best in class” operating practices. The costs related to the commissioning/stabilization of our new integrated unit at Chittarpur have affected our operating and net profit numbers in this quarter. However, we are expecting the impact of higher volumes and increased operating efficiencies from this unit to compensate in the quarters ahead. The Company expects, along with the rest of the Industry, for demand to pick up in the coming months. Various projects for housing, roads, irrigation, metros as well as new initiatives like “Smart Cities” & “Swachh Bharat” should lead to improved demand for cement in Telangana, AP and Maharashtra. The construction of the new capital of AP at Amravathi is also expected to be a catalyst in this direction”, he added.