ACC quarterly profit down 45% on subdued demand, India

Indian cement major ACC Ltd reported a 45.1 per cent drop in consolidated net profit for the second quarter of the calendar year to INR133.5 crore on the back of challenging market conditions and subdued demand.

Consolidated total income of the company fell by 2.1 per cent to INR3,037.1 crore in April-June 2015 quarter from INR3103.2 crore in the same quarter of 2014 fiscal, it added. The company attributed the decline in net profit to challenging market conditions.

“Overall construction activity remained dull with weak expenditure on infrastructure and housing sectors leading to lacklustre demand for cement. Surplus capacity in the industry heightened competition and made cement prices volatile,” the company said.

During the quarter, the company's cement sales fell by 2.4 per cent to 6.20Mt from 6.35Mt in the year-ago period.

Investment update
ACC added that its Jamul clinker project in Chhattisgarh state is scheduled to be commissioned by the end of 2015. Meanwhile, cement grinding units at Jamul and Sindri (Jharkhand state) are expected to commence in the first quarter 2016, which is a delay of around one quarter.

Outlook
On outlook, it said": “We expect demand for cement to pick up gradually over the next couple of quarters, with the government's increasing focus on infrastructure development as well as on the promising new projects of Smart Cities and Housing For All.”