Holcim Group companies — ACC and Ambuja Cement – have managed to post a better financial performance despite a fall in production and drop in sales realisation. This was largely due to writeback of income-tax provisions during the March quarter and an additional depreciation recognised for the March quarter last year.
ACC reported that its consolidated net profit more than doubled to Rs 438 crore (Rs 151 crore), even as sales dipped three per cent to Rs 2,911 crore (Rs 2,998 crore). Sales volume were down four per cent at 6.42 million tonnes (mt) against 6.72 mt registered in the same period last year.
The company has recognised a write back of tax provision of Rs 141 crore in the March quarter this year and additional depreciation charge of Rs 335 crore in the same quarter, last year.
Demand during the March quarter is usually expected to be robust, but it was not true this year, due to overall slowdown in the infrastructure and real estate activities, said ACC in a statement. The slack demand also led to subdued realisations, it added.
The company’s earning before interest, tax, depreciation and amortisation was down 24 per cent at Rs 492 crore (Rs 648 crore).
Ambuja Cement managed to book 56 per cent increase in net profit at Rs 488 crore (Rs 312 crore) in the March quarter. Profit was boosted by write back of income tax provision of Rs 117 crore and additional depreciation charge of Rs 279 crore in the corresponding quarter ended March 2012.
Sales volume was down four per cent at 5.80 mt. Net sales dipped three per cent to Rs 2,545 crore, while earnings before interest, tax, depreciation and amortisation decreased 28 per cent to Rs 563 crore. Overall expenses were up five per cent at Rs 2,124 crore (Rs 2,005 crore).
The cement industry is currently facing subdued demand on account of the economic slowdown, while realisations are under pressure in an environment of over capacity, said the company.
Ambuja Cement expects to overcome the tough market condition by improving operational efficiency and productivity.
Shares of ACC and Ambuja Cement were down two per cent and one per cent at Rs 1,230 and Rs 188, respectively, on Friday.