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ACC surprises: Posts rise in OPM

Oct 25, 2000

In an environment where cement companies have posted sharp declines in operating margins, ACC Limited, one of India's largest cement companies, has posted a sharp rise. The company has attributed this to the effective implementation of cost cutting measures and the commissioning of captive power plants.

(Rs m) 2QFY00 2QFY01 Change
Sales 6,290 6,745 7.2%
Other Income 253 244 -3.6%
Expenditure 5,865 6,165 5.1%
Operating Profit (EBDIT) 425 580 36.6%
Operating Profit Margin (%) 6.7% 8.6%
Interest 379 424 11.7%
Depreciation 279 355 27.2%
Profit before Tax 19 45
Other adjustments -200
Tax - -
Profit after Tax/(Loss) 19 (155)
Net profit margin (%) 0.3% -2.3%
Diluted number of shares 171 171
EPS(annualised) 0.4 (3.6)

During the quarter the company sold (excluding traded cement) 2.3 million tonnes of cement, reflecting a YoY rise of 5.8%. Including traded cement, however, sales jumped 8%, as against the industry growth rate of 4% during the quarter.

If the extraordinary expense is ignored, the company has also posted a YoY increase in net profits. This expense pertains to the write down in the value of certain assets and investments.

We have projected a full year loss of Rs 783 m for ACC. However, in view of the faster than anticipated rise in the operating margins, we will be relooking at our estimates.

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