The company has avoided an operating loss in the quarter with a total "other income" of over Rs 52 crore. Buoyed by profit from sale of assets and investments, and a slew of favourable sales tax decisions, the cement major has, instead, shown a net profit of Rs 34.02 crore, up from a modest Rs 8.10 crore in the same quarter last year.

With the sale of captive-power units to Tata Electric for Rs 90 crore concluded this month, ACC is assured of a safe `other income' cushion for the fourth quarter as well.

Net sales in the third quarter stood at Rs 633.58 crore, up from Rs 606.04 crore in the corresponding quarter last year, while other income zoomed from Rs 19.37 crore to Rs 46.33 crore.

At the Bombay Stock Exchange, the ACC scrip closed at Rs 1,143.50, afteropening at Rs 1,133 and touching an intra-day high of Rs 1,214. Total volumes at the ACC counter were 4.42 lakh shares.

"The non-recurring items up to the third quarter ended December 31, 1998, include write-back of provision made in earlier years relating to tax incentives in respect of the Wadi power plant, write-back of concessional central sales tax liability for earlier years pertaining to Karnataka sales no longer required, accrual of incentives pertaining to previous years relating to the Kymore one-million-tonne plant and profit on sale of investments," says a release.

Profit before tax shot up to Rs 38.01 crore, from Rs 9.05 crore in the third quarter last year.

During the first nine months of the current financial year, ACC posted a net profit of Rs 55.12 crore, a 90 per cent rise over the corresponding period last year. Net sales increased to Rs 1,824.73 crore, from Rs 1,778.91 crore in April-December last year, while other income increased from Rs 46.3 crore to Rs 76.2 crore.

Cement salesin the third quarter stood at 2.30 million tonnes, against 2.28 million tonnes in the same period last year. Sale of traded cement increased from 1.08 lakh tonnes to 1.99 lakh tonnes during the period. Cement sales during April-December this year increased marginally to 6.50 million tonnes, from 6.46 million tonnes last year, while sale of traded cement increased from 4.49 lakh tonnes to 5.28 lakh tonnes.

Operating profit before interest, depreciation and non-recurring items up to the third quarter was higher by 23 per cent over the corresponding period last year. "The operating expenses were maintained close to previous year's levels despite all-round inflation in coal, power and other costs," the release added.

Profit (before interest, depreciation and tax) increased to Rs 107.83 crore in the third quarter, from Rs 61.36 crore, while gross profit (after interest but before depreciation and tax) more than doubled to Rs 64.18 crore, from Rs 30 crore in the third quarter last year.

Interest charges shotup to Rs 43.65 crore in the third quarter, up from Rs 31.36 crore, while the provision for depreciation increased from Rs 20.95 crore to Rs 26.17 crore.

"Depreciation and interest charges were higher on account of the commissioning of the new 1.2-million-tonne clinkering unit at Kymore and augmentation of grinding capacity to 0.6 million tonne at Sindri," the company has said.

INSIGHT:

Fall in cement price is concerning: For the third quarter, ACC's "other income" is Rs 52.13 crore and PBT is Rs 38.01 crore. The cement division must have barely broken even for the period. With Tisco's cement unit being purchased by LaFarge, income from traded cement--Rs 52 crore in the third quarter-will be virtually nil. While the write-back of provision has boosted accounting profits, it will not result in any cash inflow. An ominous sign is that in the eastern region the price of cement has declined in November and December after crossing Rs 170 per bag. The sale of the power plant will result in"other income" in the last quarter also.