ACC reports drop of nearly 7% in Q1 consolidated net profit at Rs 323 cr

Cement maker ACC Ltd on Tuesday reported 6.64 per cent decline in consolidated net profit at Rs 323.02 crore for the March quarter 2020, impacted by volume decline during the lockdown last month.

The company, which follows January-December financial year, had posted a profit of Rs 346.02 crore in the same quarter a year ago, ACC said in a BSE filing.

Total revenue from operations was down 10.65 per cent to Rs 3,501.71 crore during the quarter under review as against Rs 3,919.11 crore in the year-ago period.

The Covid-19 pandemic is rapidly spreading throughout the world. ACC's plants and offices are under nationwide lockdown since March 24, 2020. As a result of lockdown the volumes for the month of March 2020 have been impacted, said ACC.

The company is monitoring the situation closely and will resume operations in a phased manner taking into account directives from the Government, it added.

Its total expenses in January-March 2020 were at Rs 3,083.78 crore as against Rs 3,555.84 crore in the year-ago period.

ACC's cement sales volume in March quarter 2020 was down 12.06per cent to 6.56 million tonne as against7.46 million tonne in the corresponding year-ago quarter.

The Company witnessed weak offtake during the quarter due to the Covid-19 nationwide lockdown from March 24, 2020. Cement sales volumes declined by 12 per cent during this quarter as compared to the same period previous year, it said.

Its Ready Mix Concrete business was almost flat at 0.93 million cubic metres as against 0.94 million cubic metres.

"Until February 2020 , Cement and Ready Mix Concrete volume benefitted from a healthy growth. Despite COVID-19 impacting operations in the month of March, we have delivered a double digit growth in EBITDA for the first Quarter of 2020 compared to same period last year," ACC Managing Director & CEO Sridhar Balakrishnan said.

This growth has been supported by significant focus on premium products, increase in value added solutions in our Ready Mix business and results of cost reduction exercise in manufacturing and logistics, he said.

The company will continue to focus on enhancing operational efficiencies, reducing costs and improving productivity.

Input cost of raw materials were lower on account of better material source mix optimization and supply chain efficiencies, he said.

Over the outlook, Balakrishnan said he believes that with higher probability of normal monsoon, growth in rural economy will revive and stay strong.

Despite uncertainty surrounding the Covid-19 pandemic and lockdown restrictions, the company believes that, post lockdown, supportive measures and stimuli from the Government & RBI will help spur demand growth notably in the infrastructure segment. We expect cement demand to increase in the medium term once the pandemic subsides, he added.

Shares of ACC on Tuesday settled at Rs 1,136.40 per scrip, down 3.34 per cent, on the BSE.