Good evening, ladies and gentlemen. This is Alan Chapple, Director of Corporate Communications at Rain Carbon Inc. In just a moment, we will take you through the performance of Rain Industries Limited during the Q1 of 2022. Presenters are Mr. Jagan Mohan Reddy Nellore, Vice Chairman of Rain Industries Limited, Mr. Gerard Sweeney, President of Rain Carbon Inc., and Mr. T. Srinivasa Rao, Chief Financial Officer of Rain Industries Limited. Before we begin, management would like to mention that some of the statements made in today's discussion may be forward-looking in nature, and they could be affected by certain risks and uncertainties. The company's actual results could differ materially from such forward-looking statements. Now, if you could turn to slide three, Mr. Jagan Mohan Reddy Nellore will provide an update on key developments recently within the Rain group. Thank you, and over to you, Jagan.
Thank you, Alan. Good evening, everyone. We finished the Q1 with an EBITDA of INR 8.35 billion, compared with INR 5.41 billion during the previous quarter. This increase in EBITDA earnings was primarily the result of continued strong demand for most of our products, combined with the time lag between sales prices and raw material price resets, and our ability to maintain margin despite rising raw material costs. As you are all aware, the market conditions are extremely volatile given the geopolitical situation in Europe. As mentioned last quarter, this forced us to change certain sales contracts to allow more flexibility around price changes and the passing on of abnormal energy costs. We are watching the market conditions closely so we can adjust as quickly as conditions change.
Another significant contribution, as anticipated, came from our advanced material business, which rebounded after posting a negative EBITDA in the Q4 of 2021. As we indicated in our previous call, this improvement was expected since our Q4 performance was heavily impacted by opportunistically timed turnarounds, reduced production of some products due to energy costs, and a combination of other one-time factors. Looking ahead, we anticipate demand for our products to remain reasonably strong, at least through the first half of the year. Beyond that, we will be watching closely to see if global events like the Russia-Ukraine conflict and the COVID lockdowns in China persist. Any escalation could further disrupt the global supply chain and reduce raw material availability, aluminum production, and certainly Chinese demand for some of our products.
We are also monitoring the impact of inflation and the rising interest rates, which could have a dampening effect, but again, not likely before the second half of the year. Given the robust start to the year, in the absence of any major global potholes, we remain optimistic that our 2022 performance will again be within our historically normal range. Moving on to slide four. The high energy costs that we have seen in Europe since the Q3 of 2021 continue to hamstring aluminum production in the region. We are hopeful that energy prices will fall to a point where European smelters could economically resume or even increase production subject to geopolitical issues. In the meantime, with LME prices continuing to hover around $3,000, there is plenty of incentive for smelters in other regions with lower energy costs to fill the void.
At the same time, the world's two largest aluminum producers, Russia and China, bear watching. If sanctions against Russian products eventually impact its aluminum exports, that could provide further incentive for the smelters in other parts of the world to increase production. Conversely, if the COVID lockdowns in China that are reducing domestic aluminum production and the sale of aluminum-containing products persist, this could have a chilling effect on the global aluminum market. While Russia, China, and Europe are near-term question marks, we believe that aluminum production will remain robust in this high demand environment that is supported by strong LME prices. In regard to the cement division, the demand continues to be reasonably strong in South India.
However, the cost of fuel and the recent power cuts in the state of Andhra Pradesh for industrial consumers continues to be a cause of concern, thereby impacting the near-term supply. With this business update, I will now turn over the presentation to Gerry Sweeney to take you through the industry and other business updates on slide five. Gerry?
Thank you, Jagan. Good evening, everyone. It is a pleasure to discuss the industry trends during the Q1 of 2022 with you. Let's turn to slide five. During our last call, our segment discussion focused on the disappointing numbers posted by our advanced materials business. One quarter later, we are very pleased that the one-time issues I mentioned earlier are now behind us, and our advanced materials business is again performing as expected. The turnaround from - INR 927 million of EBITDA in Q4 of 2021 to + INR 894 million EBITDA in the Q1 of 2022 was heavily supported by our advanced resin sales.
In recent calls, we've told you that we fully expect our investment in the hydrogenated hydrocarbon resins plant to contribute to EBITDA by end of 2022, and that we should be operating at 75% of capacity by the end of the year. In that vein, I'm pleased to report that HHCR volumes of 2,977 tons in Q1 was the highest yet for this major capital investment project, representing a 57% increase over the previous quarter. Most importantly, the new reactors installed in December are performing well, and this upgrade is reducing our maintenance costs and downtime while enhancing production of our advanced resins. Looking at the rest of the advanced materials segment, demand across the portfolio remains strong for nearly all of our chemical intermediates, resins, and downstream products.
The other turnarounds at our BTX and phthalic anhydride plants that were completed in December put these facilities in a position to meet market demand for the coming year. As in recent quarters, demand for our CARBORES engineered product, which is used in refractory and graphite products, as well as our PETRORES specialty coating for lithium-ion batteries, has our production facilities running at full capacity. Given strong demand and positive sustainability profile of these products, we continue to explore opportunities to expand our production. Looking ahead at this segment, we expect demand for our advanced materials products to remain strong. While we are experiencing some logistical challenges in China that are impeding our ability to sell CARBORES and PETRORES in the country from our warehouses due to the local COVID lockdowns, it is not having a material impact at this time.
Elsewhere, during the coming quarters, with the return of warm weather, we will see our typical seasonal increase in sales of our asphalt sealer products. As far as costs are concerned, we continue to hedge our natural gas with contracts extending into early summer. At the same time, we have incorporated alternative energy solutions into our production sites to mitigate the increased costs as well as energy savings initiatives, which have helped reduce consumption. Moving on to our carbon segment, we continue to enjoy strong demand for calcined petroleum coke and coal-tar pitch from the aluminum industry. CPC demand from customers in the titanium dioxide industry also remains solid. This said, CPC volumes were down by about 9% due to prolonged shutdown of our plant in India due to shortfalls of raw materials.
Since the vertical shaft kiln plant is still ramping up, it was not able to make up the volumes lost by an extended shutdown of one of our two rotary kilns in India. Looking ahead, we will continue to work with the Indian authorities to secure GPC import allocations for the new calciner that is separate from the allocation from our rotary kiln plant. In the meantime, the rotary kiln plant has received reduced import allocation for the current Indian fiscal year of approximately 409,000 tons from nearly 452,000 tons in the previous year. This is disappointing considering that more CPC produced at our calcination plants in India, the better it is for India's environment overall.
That's because our calciners are the only ones in India that have operating state-of-the-art flue gas desulfurization systems that remove more than 98% of our sulfur dioxide emissions. Just as important, both of Rain's calciners are unique in that way they combine our emission scrubbing technology with highly efficient systems to capture and convert the waste heat given off in the calcination process into electricity, rather than allowing the heat to simply escape into the atmosphere. We are unique in this way. These waste heat recovery systems enable us to co-generate clean electricity for Indian consumers. When both kilns are running at full capacity at Visakhapatnam, and vertical shaft calciner is connected to the grid, we will have the ability to export 55 MW of power to the power grid.
Elsewhere in the United States, we continue to shake out and ramp up our new production facility for anhydrous carbon pellets for ACP, and are pleased to announce that we shipped our first industrial trial batch of calcined ACP to a major global aluminum industry customer in the first quarter. Two weeks ago, I visited the ACP plant and came away very impressed with the progress we are making. That said, this proprietary Rain ACP material is a new product for the industry with an entirely new production process. As such, we expect that there will be a prolonged learning curve. We are optimistic about the potential of ACP and are looking forward to seeing how the industry accepts it. Looking ahead, GPC availability remains a challenge globally, and the COVID lockdown in China has further tightened supply. That, of course, is pushing up raw material costs.
We are mindful of the upcoming hurricane season as well in late summer and fall in the U.S. Gulf. Given the fact that a higher than average number of storms are predicted to hit the Gulf of Mexico this year, we will be carefully managing our inventory to navigate any short-term impact on GPC availability that might occur if regional oil refineries are impacted. Moving on to the distillation side of our carbon segment. Demand for our products remains strong, as did our margins, despite historically high energy costs in Europe. Coal tar pitch volumes continued to be strong, driven by robust sales to the aluminum and graphite electrode industry. In addition, the ongoing increase in demand for our CARBORES and PETRORES products is driving higher internal consumption of our pitch products used in the manufacture of these advanced materials.
In our other product, carbon products category, sales of crude naphthalene and carbon black oil remained strong and in line with previous quarters. Creosote volumes were flat but solid as expected due to lower seasonal demand. Looking ahead, as I mentioned earlier, we expect the global demand for our carbon distillation products will remain strong at least through the first half of the year. While our energy intensive operations in Europe are now better able to manage their costs since we implemented more flexible pricing structures. The longer term impact of the Russia-Ukraine conflict on natural gas and oil pricing and raw material availability remains to be seen. Similarly, the current COVID outbreak in China could impact sales of our pitch-based engineered products at some point if it continues.
Before I turn the call over to Srinivasa, I wanted to let you know if you have already noticed that we removed the major projects slide from our presentation. That was a practical decision driven by the fact that all of our major projects, our HHCR plant in Germany, vertical shaft calciner in India, and the ACP production facility in the United States, have all been commissioned. Going forward, these projects will require minimal additional CapEx, and the majority of our re-reduced capital expenditures in the coming year will be devoted to plant reliability and preservation. With that, I'll now turn the presentation to Srinivasa, who will take you through the consolidated financial performance of Rain on slide six. Srinivasa, over to you.
Thank you very much, Gerry. Good evening, everyone. It is a pleasure to present our financial performance during the March 2022 quarter. In the Q1 of 2022, Rain achieved consolidated net revenues of INR 44.09 billion as compared to INR 29.90 billion in the Q1 of 2021, an increase of INR 14.19 billion. These resulted from an increase in revenue of INR 10.86 billion from our carbon segment, an increase of INR 2.82 billion from our advanced materials segment, and an increase of INR 0.51 billion from our cement business segment. Rain's consolidated adjusted EBITDA increased by INR 1,095 million compared to the prior year.
This resulted from an increase in the carbon segment by INR 1,723 million and increase in the advanced materials segment by INR 282 million, offset by a decrease in cement segment EBITDA by INR 10 million. Now turning to the next slide on carbon segment performance. Revenue from our carbon segment was INR 30.99 billion for the quarter ended 31 March 2022, as compared to INR 20.13 billion for the same period last year. During the quarter, sales volume decreased by 5.5% compared to Q1 of 2021, driven by extended shutdowns due to raw material unavailability. Further, the average blended realization increased by 63%, driven by higher demand and market quotations across all the regions.
There was a depreciation of euro against Indian rupee by about 4% and an appreciation of U.S. dollar against Indian rupee by about 3.2%. Overall, due to the aforesaid reasons, revenue from carbon segment increased by 53.9% in March 2022 as compared to March 2021. Adjusted EBITDA of the carbon segment increased by INR 1,723 million as compared to March 2021 due to improved realizations, offset by depreciation of euro against Indian rupees and an increase in the energy costs. Turning to the next slide on the performance of advanced materials.
Revenue from our advanced materials segment was INR 9.25 billion for the quarter ended 31 March 2022, as compared to INR 6.43 billion for the same quarter in 2021. During the quarter, there was an increase in volumes by 3.8%, primarily related to the higher throughputs, ramp-up of the hydrogenated hydrocarbon resin plant, and increased demand from refractory and lithium-ion battery producers. During March 2022 quarter, the average blended realization increased by 38.7%, primarily due to changes in the oil-related prices and a change in the product mix and customer mix, offset by depreciation of euro against Indian rupee by 4%.
Due to the aforesaid reasons, revenue from advanced materials segment increased by 43.9% during March 2022 as compared to March 2021. Adjusted EBITDA for the advanced materials segment increased by INR 282 million due to improved realizations, offset by depreciation of euro against Indian rupee and an increase in the energy cost. Moving to the next slide on cement business. During the Q1 of 2022, cement revenue increased by 15.3% compared to Q1 of 2021. The increase was primarily driven by an increase in realizations by 9.2%, coupled with increase in volumes by 5.6%. However, cement EBITDA decreased by INR 10 million due to higher operating costs, offset by an increase in volumes and realizations.
Moving on the next slide on debt. We ended the quarter with total debt of $1,153 million, including working capital debt of $95 million. Net debt was $933 million. Based on LTM EBITDA of $365 million, we ended the quarter with a net debt to EBITDA ratio of 2.6x. We are comfortable at this level as our average borrowing costs stood at around 5%, and we expect it to remain stable since the floating rate portion of our long-term debt is tied to the Euribor, which is still negative. You would have noted the decrease in senior secured note balances that represent repurchase of bonds during the quarter March 2022.
Referring to comments of last quarter, we are dealing with significant use of working capital in this spot pricing market for all products, and that during the quarter we used approximately $85 million on these requirements. We do not foresee this trend reversing in the near term. We incurred $18 million towards capital expenditure including plant and turnarounds during the quarter. Our requirement for expansion capital projects to be minimal going forward. With that, I will now turn the presentation to Mr. Jagan for closing remarks. Over to you, sir.
Thank you, Srinivas. With our seventh consecutive quarter of increased revenue and EBITDA above INR 8 billion, we are pleased with our quarter one performance. As you know from our past presentations in our business, it is not uncommon for one segment to perform well while the other doesn't. Not so during the Q1 and the numbers we posted demonstrate that. Looking at our recent performance, our belief is that as COVID has shifted from pandemic to endemic, we are seeing boomerang effect. During the Q1 of COVID, demand was suppressed by lockdowns and shutdowns. Now, pent-up demand has spurred a commodity super cycle, which produces opportunity margins that we are very happy to benefit from. Long term, however, we do not expect this commodity cycle to be sustainable or the current environment to be new normal.
The strong earnings and margins that we enjoyed in the Q1 are being challenged by rising raw material costs, ongoing logistics and supply chain issues, and the situations involving Russia and China. Given those challenges and the likely return of global economic demand and commodity pricing to the old normal, please be rest assured that we are doing all that we can to maintain our historical EBITDA margins. That includes carefully managing our costs, protecting our margins, and continuing to improve our plant reliability and raw material utilization, all while making meaningful progress on our journey to become the most sustainable company in our industry. Thank you for your continued interest in Rain Industries Limited, and we look forward to next quarter's presentation. Thank you.