Carborundum Universal Limited , a leading manufacturer of abrasives, ceramics, and electrominerals, has announced the resumption of operations at its Electrominerals division facilities in Kerala. The company's plants in Ernakulam and Thrissur districts are now back in action following a period of suspension due to the COVID-19 pandemic.

Resumption of Operations

The reopening of these facilities comes after Carborundum Universal secured an exemption order from the Department of Industries, Government of Kerala. The company has also obtained necessary permissions from local administrative authorities to restart its operations.

COVID-19 Impact and Response

Like many businesses across India, Carborundum Universal had previously suspended manufacturing operations at various locations in compliance with government advisories aimed at controlling the spread of COVID-19. The resumption of activities at the Kerala facilities marks a significant step towards normalcy for the company.

Safety Measures in Place

In its announcement, Carborundum Universal emphasized that the health, safety, and well-being of its employees remain the top priority. The company stated that it has implemented necessary precautionary hygiene and safety measures at the reopened facilities to ensure a safe working environment.

Outlook for Other Facilities

While the Kerala Electrominerals division facilities are now operational, Carborundum Universal noted that operations at its other facilities will resume only when permitted by respective local administrative authorities. This phased approach to reopening aligns with the varying COVID-19 situations and regulations across different regions.

The resumption of operations at these key facilities is likely to be welcomed by stakeholders, as it signals a gradual return to regular production levels for Carborundum Universal. However, the company's overall recovery will depend on the reopening timeline for its remaining facilities and the broader economic conditions in the wake of the pandemic.

Carborundum Universal Limited (CUMI) has released its financial results for the first quarter, revealing a mixed performance across its business segments. The company reported consolidated sales of Rs. 1,207.00 crore, marking a modest 1.9% growth compared to Rs. 1,184.00 crore in the same quarter of the previous year.

Profit Decline Despite Revenue Growth

Despite the slight increase in revenue, CUMI experienced a significant drop in profitability. The consolidated profit after tax and non-controlling interest stood at Rs. 62.00 crore, down from Rs. 113.00 crore in the same quarter last year. This represents a 45% year-on-year decline in net profit.

Segment Performance

The company's performance varied across its three main business segments:

Ceramics

This segment showed the strongest growth, with consolidated sales increasing by 11.1% to Rs. 300.00 crore. The profit before finance cost and tax for ceramics grew by 15.8% to Rs. 75.00 crore, driven by higher export volumes and a favorable product mix.

Electro Minerals

Consolidated sales in this segment grew by 6.3% to Rs. 405.00 crore. However, profit before finance cost and tax saw a sharp decline to Rs. 4.40 crore from Rs. 43.00 crore in the same quarter of the previous year, primarily due to lower volumes in the Volzhsky Abrasive Works (VAW) subsidiary and increased competition from low-cost imports.

Abrasives

This segment faced challenges, with consolidated sales declining by 8% to Rs. 508.00 crore. Profits before finance costs and tax dropped significantly to Rs. 11.00 crore from Rs. 55.00 crore in the previous year, attributed to lower volumes in both the standalone business and RHODIUS subsidiary.

Standalone Performance

On a standalone basis, CUMI reported more positive results:

• Sales grew by 5.2% to Rs. 698.00 crore
• Net profit increased to Rs. 145.00 crore, compared to Rs. 93.00 crore in the same quarter of the previous year

It's worth noting that the standalone profit includes a one-time dividend income of Rs. 68.00 crore received from a subsidiary.

Financial Position

The company maintained a strong financial position with a consolidated debt-equity ratio of 0.05. Capital expenditure for the quarter amounted to Rs. 64.00 crore.

Conclusion

Carborundum Universal faced a challenging quarter, particularly in its abrasives and electro minerals segments. The ceramics segment, however, demonstrated resilience and growth. As global economic conditions remain uncertain, CUMI's performance in the coming quarters will likely depend on its ability to navigate market challenges, particularly in its underperforming segments, while capitalizing on the strengths of its ceramics business.