ACC & Ambuja Q3 profits surge on low input costs, high demand

Written by fe Bureaus | Mumbai | Updated: Oct 29 2009, 06:11am hrs
Holcim group companies ACC Ltd and Ambuja Cements Ltd on Wednesday declared profits for the third quarter ended September 2009 with fuel and power costs sliding during the period. Increased spending on infrastructure projects and delayed monsoon also resulted in strong demand during the quarter.

ACC Ltd reported a 59.8% growth in its net profit to Rs 415.51 crore for the quarter ended September 2009 against Rs 259.98 in the corresponding quarter last year. The companys sales during the quarter stood at Rs 2,077.38 crore, up 9.3% compared to Rs 1,900.09 crore in Q3 2008.

The company was benefited by a fall in the coal prices, which resulted in a 9% YoY cost decline and a 6% Y-o-Y rise in realisation.

The benefit of lower coal prices in reducing our manufacturing cost was partially offset by an increase in the cost of raw materials like gypsum, slag and fly ash coupled with an increase in diesel prices and in royalty in limestone, the company said in a statement.

Consolidated profit before tax went up from Rs 395.63 crore to Rs 605.34 crore during the quarter. ACC, in which Swiss cement major Holcim holds 46.21% stake, said its sales volumes were marginally up by 3.2% to 5.01 million tonnes against 4.86 million tonnes in the same period last year.

ACC Ltds shares on Wednesday slipped 1.63% to close at Rs 745.95 on the Bombay Stock Exchange.

Going ahead, ACC said it expects a significant increase in demand from the infrastructure sector and other development schemes of the government as well as from growth in the smaller cities and semi-urban markets of the country.

It however indicated sizable additional capacity to come on stream in the next year in all the regions.

Holcim group company Ambuja Cements said its net profit grew 27.2% to Rs 318 crore for the third quarter ending September 2009 against Rs 250 crore in Q3 2008. Its net sales during the quarter grew 16.1% to Rs 1,611 crore against the same period last year. According to the company, its net sales grew on the back of higher volumes, change in domestic and export market sales and improvement in realisation.

Input cost moderated to some extend and Ebidta for the quarter improved by 13% YoY from Rs 409 crore to Rs 462 crore, Ambuja said in a statement.

Ambuja Cements domestic sales volumes increased 9.1%, from 3.6 million tonnes to 3.9 million tonnes, whereas exports were only 150,000 tonnes compared to 300,000 tonnes last year. Shares of Ambuja Cements on Wednesday dipped 2.01% to close at Rs 87.65 on BSE.

Cement companies in India have witnessed strong growth in the July-September quarter on the back of increased construction activity as the government increased spends on infrastructure such as housing, roads, ports and power stations.

The company is still concerned about the pressure on prices. It said, Pricing pressure has begun to appear in certain markets, particularly in the southern and central regions, and may persist into 2010. The recent hike in domestic coal prices will also put additional pressure on operating margins.