Kolkata, Aug 12 (IANS) MP Birla Group flagship company Birla Corporation on Saturday reported a 54 per cent decline in its consolidated net profit to Rs 43.21 crore for the first quarter ended June 30 as compared to Rs. 94.44 crore for the same period a year ago.
The company's revenue from operations during the June quarter this fiscal saw a 59.4 per cent year-on-year jump to Rs 1,667.74 crore from Rs. 1046.12 crore for the same quarter last fiscal, according to a stock exchange filing.
"Though the results are below expectations due to unforeseen disruption in some key markets where the company operates, it was a quarter of major consolidation and capacity building across functions, which makes the Group well positioned for the economic upturn expected in the coming months and the next fiscal year," said company Chairman Harsh V. Lodha.
Demand in Uttar Pradesh, which contributes bulk of the Group's cement sales in Central India, was heavily impacted due to prolonged scarcity of sand and aggregates.
Prices in North India, another major market of the company, remained subdued and sharp increase in road freight and fuel prices put pressure on margins, but this was partly compensated by the performance in Eastern markets, which witnessed an upswing in demand.
In view of the acquisition of Reliance Cement Company (RCCPL) as a wholly-owned subsidiary from August, 2016, the consolidated financial results for the quarter ended June 30, 2017 are not comparable with corresponding period, the company said in the regulatory filing.
In February last year, the company had signed a definitive share purchase agreement with Reliance Infrastructure for acquisition of its entire cement business for an enterprise value of Rs 4,800 crore. This acquisition provided the MP Birla Group company with the ownership of high-quality assets, taking its total cement production capacity to 15.5 million tonnes per annum (MTPA) from 10 MTPA, strengthening its presence in the high-growth Central region.