ACC Q1 Results: Profit declines 29.5% on-year to Rs 396 crore

ACC Q1 Earnings

Profit decline - The cement-making company, ACC Ltd, reported a 29.5% decline in its consolidated net profit at Rs 396.33 crore for the first quarter ending March 2022. In the year-ago period, the company has posted a Rs 562.59 crore profit. Sequentially, the profits were up by 41%, in the previous quarter the profit reported was Rs 281 crore.

Increase in revenue - ACC, a subsidiary of Swiss building material major Holcim group, reported a rise in revenue. The revenue was up by 3.13% from Rs 4291.97 crore to Rs 4426.54 crore in the Jan-Mar quarter (YoY). Sequentially, the revenue was up 5% from Rs 4226 crore.

Revenues for the cement business grew 4% QoQ and by 3% on a YoY basis. The revenues from the RMC business grew by 19% from the previous quarter and 10% compared to the year-ago period.

Margins impacted - Company's margins were severely impacted by the rise in pet coke and fuel prices. The cost of raw materials as a percentage of revenue from operations increased by 70 bps during the quarter to 15.4%. The power and fuel costs surged by 480 bps to 23.5% as a percentage of revenue. However, freight costs declined by 160 bps to 23.7% of revenues. 

EBITDA - Company reported an EBITDA (earnings before interest, tax, depreciation, and amortisation) of Rs 635 crore, a drop of 26% from Rs 860 crore in the year-ago quarter. Even the EBITDA margins took a hit of 570 bps. The company reported EBITDA margins of 20.4% during the same period last year, and it fell to 14.7% for the Jan-March quarter. Operating EBIT for the quarter declined by 33% to Rs 481 crore from Rs 717 crore reported in the corresponding period last year.

Cement volumes - The cement volumes for Q1 declined by 3.3% on year to 7.71 million tonnes (MT) from 7.97 MT registered during the same period a year ago.

Management commentary - "We are confident that the demand situation will further improve in the coming months, supported by an improving domestic economic environment and various initiatives from the government in terms of increased spending on infrastructure development." said Sridhar Balakrishnan, Managing Director, and CEO.

ACC Q1 Results Review:

The company has reported a mixed set of numbers for the quarter ended March 2022. While the company has reported healthy quarterly growth, its annual growth was severely impacted by the rise in pet coke and fuel prices. There was also a decline in cement volumes on an annual basis. However, the management is optimistic about the company’s growth in the coming quarters.

The share price declined by 5.35% to close at Rs 2,040 on Tuesday.