Inputs cost takes a toll on ACC, Ambuja Cement profits

Our Bureau Mumbai | Updated on November 13, 2017 Published on July 28, 2011



Higher raw-material costs, power and fuel expenses rise for both

Holcim Group companies ACC and Ambuja Cements have reported a lower net profit despite sales registering a substantial increase during the June quarter.

Both the companies follow the calendar year for accounting. ACC's sales during the quarter were up 13 per cent at 5.93 million tonnes (5.27 mt), while Ambuja Cements' fell 2 per cent at 5.29 mt (5.41 mt).

Despite higher sales

Despite ACC's improved sales volumes and better sales realisations, steep increases in the costs of coal, diesel, freight and other inputs, such as fly ash and gypsum, resulted in lower profits.

Raw-material costs for ACC jumped 24 per cent to Rs 466 crore (Rs 375 crore). Power and fuel expenses rose by 44 per cent to Rs 572 crore (396 crore) on the back of costlier diesel. On the whole, expenditure was up 23 per cent at Rs 2,116 crore (Rs 1,721 crore). The company has announced an interim dividend of Rs 11 a share.

Raw-material costs of Ambuja Cement were higher by 1 per cent at Rs 146 crore (Rs 145 crore) and power and fuel expenses rose 24 per cent to Rs 563 crore (Rs 453 crore) despite lower sales.

Gains undone

“The mitigating measures taken in terms of substitution of purchased clinker with in-house production, improvement in electrical efficiencies and improvement in realisation were able to only partly negate the steep increase in input cost,” said Mr Onne van der Weijde, Managing Director, Ambuja Cements, in a press release. EBITDA of the company fell 7.1 per cent to Rs 598 crore (Rs 644 crore). The company has also announced a dividend of Rs 1.40 a share.

Realisations for both the companies were better in April, though it fell sharply in May and June on the onset of the monsoon, said an analyst.

Shares of ACC and Ambuja Cements were up 2.37 per cent and 1.61 per cent at Rs 1,020.25 and Rs 132.75 on Thursday, respectively.

Published on July 28, 2011
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