The Hindu Business Line : ACC Q4 net profit up 56 pc; to pay Rs 7

ASSOCIATED Cement Companies has reported a 56 per cent increase in net profit for the fourth quarter of 2004-2005, at Rs 165.52 crore as against Rs 105.9 crore in the same year-ago quarter.

Net sales for the quarter rose 15.6 per cent at Rs 1,113.4 crore (Rs 962.97 crore) .

But expenditure was also higher by 14.8 per cent, at Rs 948.21 crore (Rs 825.94 crore), leading to a slight decline in profit before interest depreciation and tax which stood at Rs 206.9 crore (Rs 212.53 crore).

It was a provision for deferred tax, a credit of Rs 48.16 crore, which added to the bottomline.

For the year as a whole however, net profit registered an increase of 89 per cent, riding on higher sales of cement, better realisation and improved operating efficiency.

Net profit rose to Rs 378.39 crore, from Rs 200.24 crore during the previous fiscal.

Cement sales, at 16.29 million tonnes, rose 7 per cent by volume, while sales turnover rose 19 per cent, to Rs 3,902.06 crore (Rs 3,284.48 crore).

Profit before interest, depreciation and exceptional items, at Rs 719.67 crore (Rs 533.92 crore) recorded a 35 per cent increase.

Net interest costs were lower by 5 per cent, amounting to Rs 88.19 crore (Rs 92.91 crore). This is despite an acquisition of a captive power plant at Wadi during the year, said a statement from the company. This acquisition also led to higher depreciation, at Rs 186.86 crore (Rs 176.85 crore).

The consolidated net profit of the company rose by 83 per cent, to Rs 402.52 crore (Rs 220.13 crore). Consolidated sales turnover increased by 19 per cent, at Rs 4,227.22 crore.

The Board has recommended a dividend of Rs 7 per share, amounting to Rs 142.5 crore, including tax on dividend.

On the outlook for the future, the company said the expected demand growth of 8 per cent with no new significant capacity addition in the pipeline, is expected to lead to stable-to-improved cement prices.

The Board also approved in principle a proposal to merge the company's subsidiaries Bargarh Cement Ltd (capacity 9.6 lakh tonnes per annum) and Damodhar Cement and Slag Ltd (5.25 lakh tonnes) with the company subject to requisite approvals.

This would bring up the capacity of the company to 18 million tonnes per annum (mtpa), up from 16.5 mtpa. Ongoing modernisation projects would further increase capacity to 20.6 mtpa, said the company statement.

Following the Holcim Cement Pvt Ltd's open offer for ACC through Ambuja Cements India Ltd, which now holds 34.7 per cent stake in ACC, two additional directors from the former have been appointed to the Board.

They are Mr Markus Akermann, CEO, and board member at Holcim Ltd; and Mr Paul Hugentobler, member of the Executive Committee, Holcim Ltd.

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