ACC, the country's largest cement maker, has posted a decline of 23 per cent in its consolidated net profit for the financial year ending December, 2008 at Rs 1,099.65 crore compared with Rs 1,427.34 crore last year. The company's net sales during the year rose to Rs 7,719.69 crore from Rs 7,050.94 crore last year, up 9.48 per cent.
The year saw an increase in input costs, mainly the coal prices, however the company could not pass on the increased costs to the consumers bowing to the government's pressure to control inflation.
In the year under consideration, ACC spent 28.81 per cent more on raw materials at Rs 1,029.81 crore whereas fuel costs increased to Rs 1,611.81 crore, up 29.2 per cent. The basic earning per share stood at Rs 58.60 against Rs 76.16 crore.
The Ready Mix Concrete (RMC) business continued to pinch the company as losses increased to Rs 91.84 crore compared with loss of Rs 60.71 crore incurred in 2007. This forced the firm to defer its expansion plans in RMC business.
On the revenue front, RMC segment clocked Rs 514.53 crore against Rs 367.02 crore in 2007. The company separated its RMC business under a separate subsidiary entity - ACC Concrete - effective from 1 January, 2008.
ACC, part of the world's second largest cement Swiss giant Holcim, managed to achieve profit (before taxes) in the cement segment at Rs 1,618.02 crore compared with Rs 1,767 crore last year, down 8.4 per cent. However, the revenue in the cement segment increased to Rs 7,308.62 crore in 2008 from Rs 6,734.07 crore last year.
On the standalone basis, the company's cement sales volumes in the year was up 5.2 per cent at 21.01 million tonnes against 19.97 million tonnes in 2007. The operating EBIDTA margins for the year squeezed to 25.4 per cent from 28.2 per cent last year.
ACC is expanding its capacity to over 30 million tonnes by 2010. However, it has put deferred new commitments on other projects in the pipeline.
In its outlook, the company said that it does not expect sharp changes in the input costs and cement prices would continue to be stable in 2009. "Although urban demand growth is likely to slow down, semi-urban and rural demand for new homes is expected to grow," the company said in a statement. It added that in 2009 the cement consumption growth rate will be between 6 and 8 per cent in 2009.
On the Bombay Stock Exchange, the company's share price closed on Thursday at Rs 531.50, up 0.64 per cent.
