The Hindu Business Line : ACC net profit surges 85% in Q2; Ambuja Cements’ falls 44%

While ACC reported a sharp jump in net profit on the back of buoyant demand and impressive cost control, Ambuja Cements recorded a drop of 44 per cent at Rs 325 crore compared with Rs 577 crore in the quarter of 2008-09. That was the time when exceptional income of Rs 314 crore (from sale of investment to Holderind Investments) boosted the bottomline.

Ambuja Cements’ profit before exceptional income was up seven per cent at Rs 478 crore (Rs 442 crore). Sales rose 18 per cent to Rs 1,847 crore (Rs 1,564 crore) while volumes were up 10 per cent to 4.8 million tonnes (4.4 mt). Power and fuel cost increased 16 per cent to Rs 375 crore (Rs 324 crore) in the quarter under review.

Interim dividend

The board of directors has approved an interim dividend of Rs 1.20 an equity share and fixed the record date on August 5.

Mr A.L. Kapur, Managing Director, said the company had to increase clinker sourcing as the clinkerisation plant in Maharashtra was shut during a major half of the June quarter for repairs. Clinker purchase in the quarter rose 160 per cent to Rs 200 crore (Rs 77 crore).

ACC sales up

ACC, meanwhile, reported an 85 per cent rise in its consolidated net profit at Rs 471 crore in the second-quarter ended June 30, 2009 against Rs 255 crore in the same period last year. Sales were up 15 per cent at Rs 2,188 crore (Rs 1,906 crore) in the quarter under review.

The company sold 5.42 mt of cement, up two per cent from the corresponding quarter of 2008. The board of directors has approved an interim dividend of Rs 10 an equity share.

Mr Sumit Banerjee, Managing Director, said higher utilisation of captive power focused cost control and sustained demand due to the Government’s fiscal stimulus packages helped improve profitability in the June quarter.

Though the company has not added much in terms of capacity, demand was good in most markets where it has a presence. The 10 per cent fall in its power and fuel bill at Rs 371 crore (Rs 419 crore) also worked in its favour, said an analyst.

“Prices of major inputs used by the cement industry, including coal, may rebound from recent lows because of an anticipated uptrend in the commodity business cycle. Moreover, below-normal monsoon may put pressure on the prices of certain commodities, potentially accelerating inflation,” said Mr Banerjee.

On the BSE, ACC shares were up six per cent to Rs 855 while Ambuja Cements closed with a marginal gain of one per cent to Rs 97 on Thursday.

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