ACC delivers a stunner; Q2 adjusted net soars 89 per cent

20 July 2006

ACC, the country's largest cement manufacturer and a part of the Holcim group, has delivered exceptionally strong results for the second quarter of the current financial year. Though cement results were expected to be strong, the ACC results are way above expectations and other large cement companies are also expected to follow suit.

For the quarter ended 30 June, 2006, ACC has reported a consolidated net profit of Rs 411.79 crore – an increase of 176.46 per cent over Rs 148.95 crore reported for the same quarter of previous year. Consolidated sales revenues increased 21.49 per cent to Rs 1,477.47 crore from Rs 1,216.17 crore for the previous year quarter.

The company realised Rs 130.19 crore from sale of land and Rs 7.93 crore from sale of investments, which have been classified as exceptional items, during the quarter. Adjusted for exceptional items, consolidated net profits have increased 89.32 per cent to Rs 265.4 crore from Rs 140.19 crore.

Consolidated sales volumes of ACC during the second quarter were 4.3 per cent higher at 4.63 million tonnes as compared to 4.44 million for the same quarter of previous year.

Operating profits for the quarter increased 73.85 per cent while operating margins as a percentage of net sales improved considerably to 32.63 per cent as compared to 22.8 per cent for the prior year quarter. The sharp jump in operating margins is a result of higher results and lower input costs.

Input costs, including power & fuel, surprisingly declined 7.63 per cent during the quarter. Transportation costs were higher by 20.08 per cent while staff costs were higher by 27 per cent.