ACC net profit down 7%, improving demand outlook

India’s second-largest cement producer, ACC, reported a seven per cent decline in profit for the second quarter of the year as operational costs continued to rise. However, improvements on the demand front were noted, a trend which the Holcim group company expects to continue.

During the quarter ended June 2014, consolidated turnover was up 7.8 per cent to INR30bn (US$5bn). EBITDA, however fell 7.7 per cent to INR4.5bn. Net profit was down 7.1 per cent to INR2.43bn.

The company said it continued to face escalating manufacturing and distribution costs, although it did derive some benefits from ongoing cost leadership programme and an increase in the sales of premium products.

Cement demand did show some improvement with the company’s overall sales volumes during the quarter rising four per cent YoY. On its outlook, the company said it expects “the positive trend in demand for cement to continue as a result of government’s emphasis on housing and infrastructure development.”