ACC Net Profit Down 55 Per Cent To Rs 20 Cr

Mumbai, July 24: | Updated: Jul 25 2002, 05:30am hrs
Cement major ACC has seen a 54.85 per cent drop in net profit at Rs 19.84 crore for the June-ended quarter 2002 as against Rs 43.95 crore in the same period in the last fiscal. The company was affected by the severe drop in cement prices during the quarter which has resulted in gross cement price realisation declining by over 13 per cent as against the corresponding period of the previous year.

The total income for the quarter went up by 6 per cent to Rs 890.26 crore as against Rs 839.37 crore in the first quarter of fiscal 2001-02. Sales volume of cement including traded cement at 36.34 lakh tonne for the quarter was higher by 22 per cent as against 29.72 lakh tonne in the comparable quarter.

“The impact of the severe drop in cement prices was offset to a great extent by increase in sales volume coupled with the ongoing improvement in operating efficiencies and other cost reduction measures,” said ACC managing director TMM Nambiar.

The interest cost for the quarter was lower by 8 per cent compared to the corresponding of the previous year despite the additional interest incidence on account of the new Wadi plant mainly due to improved financial and working capital management.

During the quarter, ACC has divested its entire holding of 13.15 lakh shares in GRUH Finance in favour of HDFC for around Rs 2.76 crore. The company has also entered into a share purchase agreement to divest its entire 35 per cent stake in International Ferrites to EPCOS, AG of Germany, which is subject to necessary approvals.

The refractory and the ready-mix concrete (RMC) business have shown improvements in profitability despite the increasingly difficult business environments, according to the company. The RMC business registered a profit (before tax and interest) of Rs 1.89 crore for the quarter as against a loss of Rs 1.3 crore in the same period of the previous year.

“The June quarter has been the worst in terms of cement prices in the last five-six years. There is only one way that prices can move, i.e, upwards. We expect a 14-15 per cent demand growth in the current quarter,” said a senior ACC official.