ACC almost flat after Q1 PAT slides 6.6%

ACC was up 0.5% at Rs 1137 after consolidated net profit declined 6.6% to Rs 323 crore on 10.8% decline in net sales to Rs 3,433.02 crore in Q1 March 2020 over Q1 March 2019.

Consolidated EBITDA rose 10% to Rs 586 crore in Q1 March 2020 as compared to Rs 532 crore reported in Q1 March 2019. EBITDA margin stood at 17.1% in Q1 March 2020, higher than 13.8% in Q1 March 2019, despite the impact of COVID-19 lock down in March 2020. The result was announced after market hours on Tuesday, 21 April 2020.

The consolidated cement sales volume fell 12.06% to 6.56 million tonnes in Q1 March 2020 from 7.46 million tonnes in Q1 March 2019. The consolidated ready mix concrete sales volume also declined 1.06% to 0.93 cubic million metres in Q1 March 2020 from 0.94 cubic million metres in Q1 March 2019.

The company said it witnessed weak offtake during the quarter due to the COVID-19 nation-wide lockdown from 24 March 2020. The company assured that it continues to focus on enhancing operational efficiencies, reducing costs and improving productivity. Input cost of raw materials were lower on account of better material source mix optimization and supply chain efficiencies.

In its outlook, ACC said that with higher probability of normal monsoon, growth in rural economy will revive and stay strong. Despite uncertainty surrounding the COVID-19 pandemic and lockdown restrictions, the company believes that, post lockdown, supportive measures and stimuli from the Government & Reserve Bank of India will help spur demand growth notably in the Infrastructure segment. ACC expects cement demand to increase in the medium term once the pandemic subsides and business operations commence.

Commenting on company's performance, Sridhar Balakrishnan, Managing Director & CEO said, Operations have been severely impacted since the commencement of the nationwide lockdown from 24 March 2020 impacting volumes for March 2020. Until February 2020 Cement and Ready-Mix Concrete volume benefitted from a healthy growth. Despite COVID-19 impacting operations in the month of March, we have delivered a double digit growth in EBITDA for the first Quarter of 2020 compared to same period last year. This growth has been supported by significant focus on premium products, increase in value added solutions in our Ready Mix business and results of cost reduction exercise in manufacturing and logistics. Cement sector in India has shown strong recovery in the face of external shocks, notably the global financial crisis and demonetization. With our robust business continuity plan guiding us towards recovery path, I strongly believe we will emerge stronger from this crisis.

ACC is engaged in manufacturing of cement and ready mixed concrete. The company's segments include cement and ready mix concrete.

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