ACC slips after weak Q4 numbers

Cement manufacturing major ACC fell 2.68% to Rs 1,461.05 after consolidated net profit dropped 62.7% to Rs 273.25 crore in Q4 December 2019 (Q4 FY 2019) as against Rs 732.31 crore reported in Q4 December 2018 (Q4 FY 2018).

Net sales rose 4.8% year-on-year (Y-o-Y) to Rs 3,969.77 crore in Q4 FY 2019, supported by sales and marketing initiatives. The Q4 figures were announced after market hours on Friday, 7 February 2020.

Consolidated profit before tax jumped 20.4% to Rs 413.31 crore Y-o-Y.

The operating EBITDA grew 11% to Rs 541 crore in Q4 December 2019 from Rs 488 crore in Q4 December 2018 on the back of internal efficiencies. EBITDA margin stood at 13.6% in Q4 December 2019 as against 12.9% in Q4 December 2018.

Input cost optimized through better material source mix optimization and supply chain management. Freight & Forwarding cost reduced year-on-year due to improvement in logistics efficiency.

ACC witnessed a 35% jump in consolidated profit after tax to Rs 1,378 crore on a 6% rise in net sales to Rs 15,343 crore in the year ended December 2019 over the year ended December 2018.

The consolidated cement sales volume rose 4% to 7.76 million tonnes in Q4 December 2019 from 7.47 million tonnes in Q4 December 2018. The consolidated ready mix concrete sales volume advanced 8% to 0.93 cubic. million metres in Q4 December 2019 from 0.86 cubic. million metres in Q4 December 2018.

In a segment-wise analysis, the firm's ready mix concrete business registered a robust growth of 12% Y-o-Y. Value added products & Services (VAPS) showed a strong growth of 52% Y-o-Y. During the calendar year, fifteen new plants were commissioned bringing the company's operating ready mix plants in India to a total of 90, which contributed to the volume growth.

In its outlook, the company said that the Government's major announcement to grant full tax exemption for sovereign wealth funds for investments in infrastructure projects along with the abolition of Dividend Distribution Tax (DDT) will be positive for new investments in the sector and help in the revival of cement demand. The recently announced Rs 1.02 crore worth infrastructure projects, under National Infrastructure Pipeline (NIP) Scheme that will be implemented in the next five years is also expected to drive cement demand.

Commenting on the Q4 performance, Neeraj Akhoury, the managing director and CEO of ACC, stated, "We continue on our strong growth trajectory and have delivered a robust performance. Expansion in EBITDA has been supported by growth in premium products, higher value added services in our Read Mix Concrete business and efficiencies in manufacturing, supply chain and support functions. Our expansion projects are well on track. We welcome the Government's National Infrastructure Pipeline which will boost economy and the cement demand."

Meanwhile, the board has approved and proposed a dividend payment of Rs 14 per equity share aggregating to a total of Rs 262.90 crore.

ACC is engaged in manufacturing of cement and ready mixed concrete. The company's segments include cement and ready mix concrete. The firm manufactures cement, which includes ordinary portland cement (OPC), portland pozzolana cement (PPC), portland slag cement (PSC) and ready mixed concrete (RMX). The company's products include portland cement and premium cements, bulk cement.

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