Birla Corporation Ltd, the flagship company of MP Birla Group, posted a 53 per cent drop in net profit on a consolidated basis to ₹66 crore for the quarter ended June 30 against ₹141 crore in the same period last year.
The dip was primarily on the back of suspension in operations of the company’s plants for nearly the whole of April. Sales were also impacted that month. Though things started to move in May, normalisation of operations happened only in the latter half of the month. However, local lockdowns and restrictions continued to hobble operations, the company said in a press release.
“Although it took longer than expected to restart operations, all teams mobilised for rapid ramp-up to deliver a high run-rate in the latter part of May and June. This partially compensated for the loss of volumes and earnings in the six weeks of the quarter, although sporadic disruptions in isolated pockets in core markets continued,” the release said.
Revenue down 35%
Revenue on a consolidated basis during the April-June quarter (including other income) declined by 35 per cent to ₹1,241 crore as sales by volume dropped 34 per cent to 2.4 million tonnes (mt).
The company, however, managed to protect realisations despite the subdued demand and across-the-board inventory pile up. Realisation for the June quarter at ₹4,906 a tonne was 0.5 per cent lower than last year, mainly because of the soft prices prevailing in the eastern markets.
The 5 per cent drop in EBITDA per tonne at ₹981 for the June quarter was on account of low fixed cost absorption, low capacity utilisation and the adverse situation prevailing in some of the key markets of the company. Sudden lockdown in the third week of March had also led to pile up of inventory at the depots which was liquidated during the quarter, the release said.
The company’s board has approved the proposal to expand the capacity of grinding cement plant at Durgapur by installing a cement grinding unit with a capacity of 0.24 million tonnes per annum (MTPA). The capacity of grinding cement plant at Durgapur will increase to 1.54 MTPA after the expansion.
The company has undertaken several measures to rationalise costs and improve efficiencies across the board. To shore up profitability, a special drive has been undertaken to aggressively reduce fixed costs and optimise transportation and distribution costs, including the cost of transporting fly ash by rail.