Cement manufacturer ACC on Tuesday posted a 29.6% fall in its net profit to Rs 396.33 crore for the first quarter ended March 31, impacted by a rise in fuel costs driven by the overall geopolitical situation.
ACC, a subsidiary of Switzerland-based building materials conglomerate Holcim, follows a January-December financial year.
A consensus estimate of Bloomberg analysts was expecting the firm to post a net profit of Rs 384.8 crore for the reporting quarter. In comparison, the company had posted a net profit of Rs 562.59 crore for the same quarter of last financial year.
During the quarter under review, the company’s total income rose 3.43% to Rs 4,485.01 crore from Rs 4,335.94 crore recorded in the year-ago period. The company’s Ebitda fell 26% to Rs 635 crore during the reporting quarter from Rs 860 crore posted in the comparable year-ago quarter, while Ebitda margin fell 14.7% from the earlier 20.4%, the company said in a statement.
The Ebitda fell due to significant fuel cost increase despite its Parvat project delivering strong internal efficiencies, it said.
“The January to March 2022 quarter was impacted due to the global rise in fuel costs driven by the overall geopolitical situation. Our efficiency and cost reduction actions under project ‘Parvat’ remained very strong and helped us partially offset the impact. The new investments in waste heat recovery systems will help us mitigate the energy cost inflation while also strengthening our sustainability actions,” managing director and CEO Sridhar Balakrishnan said.
“The India story remains intact. Our ongoing initiatives on growth, sustainability and productivity improvements will continue as we progress on the consequent execution of our strategy,” he added.
ACC’s Ametha project is progressing ahead of schedule to add 5 MTPA capacity and commissioning of the unit is expected in the fourth quarter of 2022. The company’s Tikaria grinding unit with 1.6 MTPA capacity was commissioned in February 2022, while its waste heat recovery projects at Jamul and Kymore plants are on track.
The company’s board has also approved the next phase of projects at Chanda and Wadi plants, following which the total capacity will reach 75 MW.
The company is confident that the demand situation will further improve in the coming months supported by an improving domestic economic environment and various initiatives from the Government in terms of increased spending on infrastructure development, it added.
According to earlier reports, Holcim was looking to sell its businesses in India, including its stake in Ambuja Cement and ACC, and was in talks with companies such as JSW Group and Adani Group. Holcim holds a 63.1% stake in Ambuja and a 4.48% stake in ACC, while Ambuja also holds a 50.05% stake in ACC.
India is the second-largest cement producer in the world, accounting for about 8% of global cement production with an estimated production capacity of 550 MTPA.
