Holcim group companies ACC and Ambuja Cements have reported a moderate rise in net profits in the fourth quarter ended December 31 even as there was a fall in cement demand. The growth in profits can be attributed to write-backs of tax provisions. Without these, profits would have been almost flat.
ACC registered a 10 per cent increase in net profit at ₹276 crore in the quarter against ₹251 crore a year ago even as its sales remained flat at ₹2,693 crore (₹2,692 crore).
The board of directors recommended a dividend of ₹19 a share, aggregating a total payout of ₹417 crore (including the dividend tax).
The company managed to cut its finance cost by half to ₹12 crore from ₹27 crore a year earlier. Total expenses were up 3 per cent at ₹2,586 crore compared with ₹2,519 crore due to high power and fuel costs.
On a standalone basis, ACC’s net profit rose 16 per cent to ₹278 crore (₹239 crore), while sales dipped 13 per cent to ₹2,693 crore (₹3,099 crore). Cement production was down one per cent at 5.85 million tonnes (mt) in the December quarter. The bottom-line was boosted by a tax write-back of ₹36 crore in the quarter.
ACC managed to offset cost pressures on major inputs by managing its operating costs under its efforts to achieve cost leadership in areas such as manufacturing, logistics, sales and procurement processes, said the company in a press release.
Ambuja Cements’ net profit was up 50 per cent at ₹316 crore in the December quarter against ₹212 crore a year ago. Net sales were down 5 per cent at ₹2,191 crore (₹2,313 crore). The company’s operational cost was down 2 per cent at ₹2,025 crore (₹2,071 crore).
It announced a dividend of ₹2.20 a share.
The company recorded a tax write-back of ₹100 crore in the quarter. Sales volume last year was down 2 per cent at 21.6 mt.
Ambuja expects the outlook for cement demand to remain challenging due to macroeconomic conditions and resultant subdued demand.
On Thursday, the shares of ACC and Ambuja were up 1.07 per cent and 0.48 per cent at ₹1,018.80 and ₹155.80, respectively, on the BSE.