ACC

Q3 Net profit surges 45%

Oct 16, 2019 04:10 IST capital market

ACC, which follows January-December period as its accounting year, has posted 45% jump in its consolidated net profit at Rs 302.56 crore on the back of 3% jump in net sales revenue to Rs 3,528.31 crore for the third quarter ended September 2019, on account of better realisations, operational and supply chain efficiencies. The earnings improvement came despite weak off-take in the quarter due to extended monsoon. The Companys cement sales volumes declined 1.5% to 6.44 million tonnes during the quarter, while cement realisation improved by 3.1% to Rs 5,021 per tonne.

Management Comments

Commenting on the performance, Managing Director & CEO Mr. Neeraj Akhoury said in a statement: ACC continues to deliver its profitable growth strategy with strong EBITDA and Net Profit growth. the Company new product offerings, particularly in premium segments along with growth in ready mix volumes supported in delivering higher net sales. We continue to deliver significant operational efficiencies which resulted in reduction of our fixed and variable costs. ACCs capacity expansion strategy is under execution in attractive markets. We remain confident that cement demand growth will strengthen in the coming months.

Consolidated performance for the September Quarter

For quarter ended September 2019, consolidated total income from operation inclined 3% to Rs 3,528.31 crore. The Companys cement sales volumes declined 1.5% to 6.44 million tonnes during the quarter, while cement realisation improved by 3.1% to Rs 5,021 per tonne.

The companys ready mix concrete business registered significant growth of 10% in top line supported by higher volumes. Volume of Value Added Solutions (VAS) grew substantially in Q3CY19 year-on-year. Three new plants were added during the quarter, bringing ACCs operational ready mix plants in India to 83.

The cement segment revenue, contributing 91% of total revenue, gained 2% to Rs 3,233.40 crore. The ready-mix concrete (RMC) segment revenue, contributing 9% of total revenue, grew 10% to Rs 334.85 crore.

The Operating Margin (OPM) was up 290 bps to 15.8%, as input costs of raw materials were lower year-on-year supported by supply chain efficiency. Fixed costs as wellas Selling, General& Administrative expenses(SG&A) continued to be lower on year-on-year basis. As a result, the operating profit (OP) grew 26% to Rs 557.10 crore.

At segment level, PBIT of cement segment grew 46% to Rs 400.02 crore. The PBIT of RMC segment declined 58% to Rs 8.80 crore. Margins of cement segment increased 380 bps to 12.4% while margin was down by 430 bps to 2.6% for RMC segment.

The other income rose 55% to Rs 50.80 crore. Interest cost fell by 18% to Rs 16.26 crore, while depreciation cost was virtually flat at Rs 151.20 crore. Thus, PBT grew by 44% to Rs 440.44 crore. With gain in net Tax outgo by 43% to Rs 140.44 crore, the PAT before MI and Share of profits from Associate rose 45% to Rs 299.51 crore. After accounting profit of Rs 3.05 crore in Share of profits from associates, and NIL outflows in Minority interest, the Net Profit rose 45% to Rs 302.56 crore.

Consolidated performance for M9CY19

For quarter nine month ended September 2019, consolidated sales inclined 6% to Rs 11,597.24 crore, due to jump in sales volume and realization. The combined domestic cement sales rose 1% to 21.1 MT while realization grew 4.3% to Rs 5,053 per tonne.

The Operating Margin (OPM) grew 180 bps to 16.1%. As a result, the operating profit inclined by 20% at Rs 1,871.82 crore.

The other income grew 132% to Rs 260.89 crore, thus, the PBIDT rose 27% at Rs 2132.71 crore. With fall in interest outgo by 13% to Rs 57.01 crore and drop in depreciation allowance by 1% to Rs 445.63 crore, PBT, as a result, inclined 41% to Rs 1,630.07 crore.

The Tax Expense escalated by 41% to Rs 534.95 crore. The effective tax rate grew to 32.8% from 32.7% corresponding previous period. Thus, PAT before MI and Share of profits from Associate by rose by 40% to Rs 1,095.12 crore. After accounting gain of Rs 9.14 crore in Share of profits from associates and NIL Minority interest, the Net Profit, as a result, inclined 40% to Rs 1,104.26 crore.

Consolidated performance for CY18

For the fiscal ended December 2018, consolidated sales inclined 11% to Rs 14,801.62 crore, due to jump in sales volume partly offset by decline in realization. The combined domestic cement sales rose 8.4% to 28.40 MT while realization fell 4.7% to Rs 4,826 per tonne.

The Operating Margin (OPM) fell 60 bps to 13.8%. As a result, the operating profit inclined by 7% at Rs 2,048.12 crore.

The other income grew 11% to Rs 142.66 crore, thus, the PBIDT rose 7% at Rs 2,190.78 crore. With fall in interest outgo by 11% to Rs 87.77 crore and drop in depreciation allowance by 6% to Rs 603.22 crore, PBT, as a result, inclined 15% to Rs 1499.79 crore.

The Company has received tax credit of Rs 10.51 crore, thus, PAT before MI and Share of profits from Associate by rose by 65% to Rs 1,510.30 crore. After accounting gain of Rs 10.32 crore in Share of profits from associates and NIL Minority interest, the Net Profit, as a result, inclined 64% to Rs 1,520.62 crore.

Expansion

ACC is executing projects that will add new capacity in the markets of Uttar Pradesh, Madhya Pradesh, Bihar, Jharkhand, and West Bengal. ACC continues to look out for new growth opportunities which can add value to business.

Outlook

The Company maintains a positive outlook for demand in the coming months. The Governments recent steps such as reduction in corporate tax as well as lowering of interest rates are expected to stimulate the economy and drive infrastructure and affordable housing demand.

The scrip closed at Rs 1,498.85 on 15 October 2019 on the BSE.

ACC: Consolidated Results

 

1909 (3) 1809 (3) Var % 1909 (9) 1809 (9) Var % 1812 (12) 1712 (12) Var %
Income from Operations 3528.31 3433.18 3 11597.24 10906.02 6 14801.62 13285.13 11
OPM (%) 15.8 12.9 16.1 14.3 13.8 14.4
Operating Profit 557.10 443.52 26 1871.82 1560.32 20 2048.12 1912.43 7
Other income 50.80 32.74 55 260.89 112.65 132 142.66 128.86 11
PBIDT 607.90 476.26 28 2132.71 1672.97 27 2190.78 2041.29 7
Interest 16.26 19.94 -18 57.01 65.42 -13 87.77 98.53 -11
PBDT 591.64 456.32 30 2075.70 1607.55 29 2103.01 1942.76 8
Depreciation 151.20 150.78 0 445.63 448.05 -1 603.22 643.62 -6
PBT before EO 440.44 305.54 44 1630.07 1159.50 41 1499.79 1299.14 15
Exceptional Income/Expenses 0 0.00 0 0.00 0 0.00
PBT after EO 440.44 305.54 44 1630.07 1159.50 41 1499.79 1299.14 15
Taxation 140.93 98.85 43 534.95 378.60 41 -10.51 385.55
PAT before minority interest 299.51 206.69 45 1095.12 780.90 40 1510.30 913.59 65
Share in Profit of Associates 3.05 2.45 24 9.14 7.37 24 10.32 10.92 -5
Minority Interest 0 0 0 0 0 0
Net Profit 302.56 209.14 45 1104.26 788.27 40 1520.62 924.51 64
EPS (Rs)* # # # # 80.9 49.2
* EPS is on current equity capital of Rs 187.99 crore, Face value of Rs 10
# EPS Not Calculated As It Is A Seasonal Business
Var % exceeding 999 is truncated to 999
LP: Loss to Profit PL: Profit to Loss
EO: Extraordinary items
EPS is calculated after excluding EO and relevant tax
Figures in Rs crore
Source: Capitaline Corporate Databases

ACC: Consolidated Segment Results

 

1909 (3) 1809 (3) Var (%) % to Total 1909 (9) 1809 (9) Var (%) % to Total 1812 (12) 1712 (12) Var (%) % to Total
Segment Revenue
Cement 3233.40 3184.64 2 91 10661.87 10122.99 5 91 13705.17 13267.64 3 91
Ready Mix Concrete 334.85 303.33 10 9 1093.66 955.67 14 9 1315.21 1163.16 13 9
Total 3568.25 3487.97 2 100 11755.53 11078.66 6 100 15020.38 14430.8 4 100
Less: Inter Segment Revenue 39.94 54.79 158 173 218.76 230.08
Net Sales/Income from operations 3528.31 3433.18 3 11597.24 10906.02 6 14801.62 14200.72 4
Segment Results (PBIT)
Cement 400.02 273.93 46 98 1388.93 1039.32 34 96 1328.37 1173.78 13 92
Ready Mix Concrete 8.80 21.12 -58 2 65.18 81.01 -20 4 116.71 98.10 19 8
Total 408.82 295.05 39 100 1454.11 1120.33 30 100 1445.08 1271.88 14 100
Less: Interest 16.26 19.94 57.01 65.42 87.77 98.53
Less: Unallocable expenditure (net of unallocable income) -4.39 -5.61 -14.64 -30.00 -37.58 -33.92
Add: Interest and Dividend Income 43.49 24.82 218.33 74.59 104.90 91.87
Profit before share of profit of associates and joint ventures, exception item and tax 440.44 305.54 44 1630.07 1159.50 41 1499.79 1299.14 15
Add: Share of profit of associates and joint ventures 3.05 2.45 9.14 7.37 10.32 10.92
Less Exceptional item 0 0 0.00 0.00
Profit Before Tax 443.49 307.99 1639.21 1166.87 1510.11 1310.06
Capital Employed (Segment Assets - Segment Liabilities)
Cement 8421.5 8324.61 1 75 8421.5 8324.61 1 75 7608.79 7376.2 3 72
Ready Mix Concrete 119.6 158.18 -24 1 119.6 158.18 -24 1 138.84 94.04 48 1
Unallocated 2748.3 1327.41 107 24 2748.3 1327.41 107 24 2787.3 1888.49 48 26
Total 11289.4 9810.20 15 100 11289.4 9810.20 15 100 10534.93 9358.73 13 100
PL:Profit to Loss, LP:Loss to Profit
Var. (%) exceeding 999 has been truncated to 999
Figures in Rs crore
Source: Capitaline Corporate Database

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