The Hindu Business Line : ACC net profit in Q3 rises 30% on better realisations

Mumbai, Oct 18 Cement major ACC has reported a 30 per cent jump in net profit to Rs 292 crore in third quarter of the financial year 2008 against Rs 225 crore logged in the same period last year.

Sales turnover of the company, an affiliate of Switzerland’s Holcim Ltd, was up by 22 per cent at Rs 1,679 crore (Rs 1,378 crore).

The third quarter performance of the company was slightly below market expectations.

“We had expected the company to post a net profit of Rs 340 crore, but higher power and fuel cost had eaten into their bottomline,” said Mr Rajan Kumar, research analyst, Networth Stock Broking Ltd.

“The company has also restated its quarterly dispatches to 4.6 million tonnes against 4.76 million tonnes announced previously. Higher realisations of Rs 3,460 per tonne have saved the day for the company,” said a cement analyst with ASK Group.

The company stocks on BSE plunged 13.86 per cent to Rs 1,036 on Thursday. As on Wednesday, the stock rose 11 per cent this year, compared with Sensex’s gain of 36 per cent.

ACC’s power and fuel costs jumped 46 per cent to Rs 326 crore in the quarter from Rs 223 crore last year.

Freight charges rose 11 per cent to Rs 216 crore (Rs 194 crore) , while raw material cost was higher by 21 per cent at Rs 193 crore (Rs 159 crore).

“Hit by supply constraints due to production loss, coal prices have risen by around Rs 650 to Rs 700 per tonne this quarter from Rs 540 last year. Increase in demand from emerging economies in the backdrop of production hurdles in producing countries such as South Africa and Australia has pushed up prices, said an analyst.

Profit before interest, depreciation, exceptional items and tax, was up 23.2 per cent at Rs 477 crore during the quarter (Rs 387 crore), on account of higher sales and better product mix.

Profit before tax increased to Rs 411 crore (Rs 314 crore). “Overall, the cement industry recorded a growth rate of about 7.8 per cent during the current nine months ended September 2007. The housing, construction and infrastructure sectors continue to record strong growth which has a positive impact on cement demand,” said Mr Sumit Banerjee, Managing Director, ACC.

During the quarter under review, the company commissioned its 9-MW wind farm in Tamil Nadu and 25 MW TG set at its Kymore plant.

The implementation of Bargarh and New Wadi expansion projects are progressing as scheduled, the company said.