Cement maker ACC today reported a drop of 40 percent in its consolidated net profit at Rs 115.21 crore for the quarter ended September 30, hit by sales decline as well as subdued prices.
The company, which follows January to December as its fiscal year, had posted a net profit of Rs 192.60 crore during the same period last year, ACC said in a BSE filing.
Total consolidated income of the cement major also fell marginally to Rs 2,789.82 crore in the July-September quarter from Rs 2,814.46 crore in the same period a year ago.
Total expenses were higher at Rs 2,639.99 crore against Rs 2,577.79 crore in the reported quarter. The firm said that cement sales were poor during the July-September quarter and added that the pace of economic revival has been slower than expected.
ACC’s cement sales were down, albeit marginally, to 5.61 million tonnes (MT) in the third quarter from 5.62 MT in the year-ago period.
“With subdued construction activity in most of the monsoon season, the industry witnessed weak offtake of cement in the quarter. As a result our cement volumes were correspondingly flat. Selling prices were subdued,” ACC said.
While sales realisation was almost flat, there was improvement in input and energy costs, it added.
The company also made a contribution of Rs 38 crore to the District Mineral Foundation (DMF) and National Mineral Exploration Trust.
ACC said it continues to focus on “cost management”. On outlook, it said: “The pace of economic revival so far has been slower than expected.”
In the coming few quarters, the firm said it hopes that trends such as interest rate cut, softening of energy prices, inflation control and government’s efforts to stimulate investment across sectors will have a favourable impact on improving overall economic environment.
“This can help provide an impetus to construction activity that in turn would open up more opportunities for the growth of the cement industry,” it added. Shares of the company fell by 1.04 percent to close at Rs 1382.10 apiece on the BSE. The results were announced after the closing of market hours.
Speaking to CNBC-TV18, Murtuza Arsiwalla of Kotak Institutional Equities says there was no volume growth seen since 5 years and the growth is in line with that of the industry.