• JANUARY 20, 2000

ACC's 3QFY00 results disappoint

Associated Cement Companies (ACC) has posted a net loss of Rs 198 m during the quarter ended 31st December 1999. The company has suffered on account of a slower topline growth even as expenditure grew at a faster rate.

ACC is India's second largest cement company with a capacity of 11.6 m tonnes per annum. The company commands an 11.5% stake in the Indian cement market. Recently, Gujarat Ambuja Cements Limited acquired a 14.4% stake in the company from the Tata Group.

(Rs m) 3QFY2000 3QFY1999 Change
Sales 6,621.0 6,336.0 4.5%
Other Income 175.0 534.0 -67.2%
Expenditure 6,265.0 5,792.0 8.2%
Interest 413.0 437.0 -5.5%
Depreciation 316.0 262.0 20.6%
Profit before Tax (198.0) 380.0 -152.1%
Tax - 40.0 NM
Profit after Tax (198.0) 340.0 -158.2%
Net profit margin -3.0% 5.4%  

The company has achieved a growth of 5.8% in terms of sales volume. However, in view of the dull price recovery, the growth in sales revenues has been lower at 4.5%. The company has suffered mainly on account of the faster growth of 8.2% in expenditure due to which operating margins have taken a beating. ACC has however been successful in trimming its interest expenditure.

The sharp decline in bottomline is amplified by the fact that the company earned a significantly higher non-operating income in the corresponding quarter last year. The continued weakness in cement prices, despite a rise in volumes, has continued to suppress the fortunes of the sector.

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