India: India Cements has incurred a net loss of US$5.19m for the quarter that ended in March 2014, driven by capacity overhang and weak demand. The company had earned a net profit of US$6.86m in the same period of 2013.
Net sales fell to US$183m from US$202m during the same period of 2013, while expenses dipped marginally to US$183m."Oversupply pressure continues, coupled with poor demand in south India," said India Cement's managing director N Srinivasan. Cement demand in south India was flat during the period. Consequently the company ran its southern cement plants at 70% of their rated capacity. Its Rajasthan plant produced cement at 98% of its rated capacity.
The company has been under a corporate debt-restructuring (CDR) scheme since January 2003, which ended in March 2014 with a US$9.69m charge. India Cements also incurred a US$7.97m loss due to foreign exchange fluctuations.
"With a new government in place we expect a turnaround in demand in the second half of this fiscal year," Srinivasan said.