Mumbai, April 24: Two Holcim group companies — ACC and Ambuja Cements — have reported better-than-expected numbers for the first quarter ended March 31, 2014, on reversal of some previous accounting provision for taxes (write-back of taxes).
Ambuja Cement posted nearly a 7 per cent growth in net profit at Rs 520 crore compared with Rs 488 crore in the same period last year, much higher than the Street estimate of Rs 380 crore.
ACC, however, saw its net profit decline nearly 9 per cent to Rs 400 crore from Rs 438 crore in the year-ago period. Analysts had expected the company to post a net profit of around Rs 300 crore.
ACC said the major reason behind the drop in profits was the slow pace of infrastructure and construction projects.
ACC, the country’s second-largest cement maker, also saw manufacturing costs rising on account of higher prices of coal, fly ash and gypsum. However, higher sales of premium products helped it to recover margins.
According to the company, as there was no uptrend in demand, sales during January-March was close to the same level as in the corresponding period of the previous year at 6.48 million tonnes (6.42 million tonnes).
During the quarter, the company’s total consolidated turnover stood at Rs 2,967 crore compared with Rs 2,906 crore in the first quarter of 2013.
ACC pointed out that the net profit during the period included a tax write-back of Rs 113 crore following assessments of the previous years. The tax write-back stood at Rs 141 crore in the year-ago quarter.
Ambuja Cement saw around Rs 27 crore coming from tax write-back.
While the company was able to notch nearly a 2 per cent growth in sales at 6.06 million tonnes against 5.96 million tonnes in the same period last year, net sales grew 3.7 per cent to Rs 2,640 crore.
Ambuja Cements was cautiously optimistic on the outlook. Though the macro-economic conditions were a challenge, construction activity was likely to pick up after the elections, resulting in a modest growth in demand.
As part of its plan to grow operating margins, Ambuja Cements will look at various measures to control costs and improve production processes, the company added.