ACC, one of the country's top cement manufacturers and a subsidiary of Holcim Group, on April 19 reported a 41 percent increase in consolidated profit after tax of Rs 396 crore for the quarter ended March 2022 as compared to Rs 281 crore in the previous quarter. On a YoY basis, profit declined 30 percent from Rs 563 crore.
Consolidated revenue came in 5 percent higher at Rs 4,427 crore for the quarter, up from Rs 4,226 crore in the December 2021 quarter. On a YoY basis, the revenue grew 3 percent from Rs. 4,292 crore reported last year.
“ACC’s focussing on capacity growth, delivering cost reduction and sharp actions on sustainability has continued. Our execution capabilities to drive efficiencies and commission new projects have enabled us to make ACC significantly stronger” said Sridhar Balakrishnan, Managing Director and CEO while commenting on the performance for the quarter.
“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”.
The cement volumes for the quarter declined by 3.3 percent on year to 7.71 million tonnes (MT) from 7.97 MT registered during the same period a year ago.
Revenues for the cement business grew 4 percent on quarter and by 3 percent on YoY basis, while the revenues from RMC business grew by 19 percent from the previous quarter and 10 percent compared to the year-ago period.
The margins for the company were severely impacted by the rise in pet coke and fuel prices, which resulted in a surge in input costs.
Cost of raw materials as a percentage of revenue from operations increased by 70 bps during the quarter to 15.4 percent, while power and fuel costs surged by 480 bps to 23.5 percent as percentage of revenue.
Freight costs, however, declined by 160 bps to 23.7 percent of revenues. “Our efficiency project ‘Parvat’ helped deliver 1 percent lower per ton Freight & Forwarding cost despite fuel inflation," Balakrsihnan said.
ACC recorded an EBITDA (earnings before interest, tax, depreciation and amortization) of Rs 635 crore, a decline of 26 percent from Rs 860 crore in the year-ago quarter.
Consequently, the EBITDA margins took a hit of 570 bps from 20.4 percent achieved during the same period last year to 14.7 percent for the reported quarter.
“The January to March 2022 quarter was impacted due to the global rise in fuel costs driven by the overall geopolitical situation," said Balakrishnan.
The new investments in waste-heat recovery systems would help the company mitigate the energy cost inflation while strengthening its sustainability actions, he Balakrishnan.
Operating EBIT (earnings before interest and tax) for the quarter declined by 33 percent to Rs 481 crore from Rs 717 crore reported in the corresponding period last year.
The decline in EBITDA margins was reflected in the corresponding decline in EBIT margins, which slipped 590 bps to 11.1 percent from 17 percent last year.
While talking about the outlook, Balakrishnan said, “We are 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”.
On April 19, the stock closed at Rs 2,056.5, down Rs 98.7, or 4.6 percent, from its previous day’s close. It has generated 9.6 percent returns over the past year but has been on a downward spiral in the last month, losing 3.1 percent.
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