Workers prepare cement at a hydroelectric dam construction site in Laos. (Photographer: Taylor Weidman/Bloomberg)

ACC Jumps After Profit Beats Street For Fifth Straight Quarter

ACC Ltd.’s profit surpassed estimates for the fifth straight quarter during January-March, driven by higher realisations and cost optimisation.

The cement maker posted a net profit of Rs 245.1 crore in the reported quarter, 15.8 percent higher than the year-ago period, it said in an exchange filing. That was higher than the Rs 189 crore forecast of analysts surveyed by Bloomberg.

The company's net sales rose 14.4 percent on a year-on-year basis during the previous quarter to Rs 3,556.9 crore. This was in line with the Rs 3,508 crore projection.

The operating income or the earnings before interest, tax, depreciation and amortisation rose 18 percent to Rs 491 crore as lower input costs lead to efficiencies.

The raw material cost to net sales declined on percentage basis from 16 percent to 24 percent, while the power and fuel expenses to net sales rose to 21 percent from 15.6 percent. Besides, freight expenses to net sales on a percentage basis rose to 28 percent from 21 percent.

The operating margin expanded marginally by 40 basis points to 13.8 percent. The company said that the rise in energy and slag prices adversely impacted operating costs during the current quarter as compared to the same quarter a year ago.

“Increased government spending on infrastructure is expected to reinvigorate the construction sector and boost demand for cement and concrete during 2018,” the company said in its stock exchange filing.

Other Earnings Highlights

  • Volumes rose 7.7 percent to 7.1 million tonnes.
  • Realisation per tonne rose 6.2 percent to Rs 5,002.7.
  • Ebitda per tonne rose 9.5 percent to Rs 690.6.

Besides, ACC is seeking shareholders’ nod to renew the technology, know-how agreement with the parent for three years, it said in a separate exchange filing. The earlier deal for royalty payment expired in December 2017.

Shares of the Mumbai-based cement maker rose as much as 2.96 percent to Rs 1,620 a piece in today’s trade.