HeidelbergCement India - Lackluster Q1 performance due to covid lockdown restrictions

22-July-2020

CEMENT INDUSTRY NEWS | INDUSTRY GURU

HeidelbergCement India Ltd on Wednesday reported a 38.07 per cent decline in net profit at ₹ 48.94 crore for the first quarter ended June 2020.

The company had reported a net profit of ₹ 79.03 crore in the April-June 2020 period of the preceding fiscal, HeidelbergCement India said in a BSE filing.

Total revenue from operations declined 30.80 per cent to ₹ 407.70 crore from ₹ 589.23 crore in the corresponding quarter of 2019-20.

The company said its sales volume declined due to suspension of operations during covid lockdown period. "Volume decreased by 32 per cent, primarily driven by the suspension of operations in April 2020. The decrease in volume impacted revenue and profitability during the quarter," said HeidelbergCement India, a subsidiary of HeidelbergCement Group.

Cement sales volume during the quarter was 857 KT as against 1,258 KT earlier. Total expenses were at Rs 342.99 crore as against Rs 479.25 crore in Q1 FY20, down 28.43 per cent.

Read: South African cement industry worst affected due to corona virus lockdown restrictions

In an interview to ET Jamshed Naval Cooper, MD of HeidelbergCement India Ltd said, capacity utilization will be hovering between 55% and 60%. Today many of the cement companies will have a very high breakeven.

You cannot keep a cement processing plant shut continuously. We made a big mistake of having a lockdown in the cement plant, he said. However, he is hopeful that after Diwali (which falls in November this year), most migrant labourers will return and capacity utilisation of cement plants should touch 70%.