ACC June quarter profit falls 60% on rising global fuel costs
Cement maker ACC on Thursday posted a drop of 60.07% in its consolidated net profit at Rs 227.35 crore in the second quarter ended June 30, impacted mainly by rising global fuel costs, even as the demand outlook is “positive”.
ACC, a subsidiary of Switzerland-based building materials conglomerate Holcim, follows a January-December financial year.
A consensus estimate of Bloomberg analysts was expecting the firm to post a net profit of Rs 296.6 crore in the June quarter.
In comparison, the company had posted a consolidated net profit of Rs 569.45 crore for the same quarter of last financial year. During the three-month period under review, ACC’s revenue from operations rose 15% to Rs 4,468.42 crore from Rs 3,884.94 crore, the company said in a regulatory update.
During the reporting quarter, the firm’s power and fuel costs rose to Rs 1,311.92 crore, up 58% from Rs 830.17 crore recorded during the comparable year-ago quarter.
“The April-June quarter was impacted by rising global fuel costs and related inflationary impacts. We were able to mitigate part of this impact through our efficiency project ‘Parvat’. The cost reduction journey will be further accelerated with commissioning of waste heat recovery projects in Jamul, Kymore and Ametha plants taking the share of green power to 15%,” ACC MD and CEO Sridhar Balakrishnan said.
“The integrated unit at Ametha will be commissioned in the fourth quarter of 2022. Land acquisition and other actions for the grinding unit project at Salai Banwa are progressing as per schedule,” he added.
The company’s Ebitda during the quarter fell 51% to Rs 426 crore from the year-ago period due to significant impact of fuel cost increase. As of June 30, ACC’s cash and cash equivalent stood at Rs 4,517 crore.
“Prediction of a normal monsoon will augur well for the rural economy. We maintain a positive outlook for demand in the coming months,” it added.
Shares of ACC closed 0.8% lower at Rs 2,156.40 on the BSE. The stock has outperformed benchmark Sensex over the last six months with 8.6% fall against the Sensex’ loss of 12.8%.