ACC Q4 net down 69%;optimistic on concrete roads, construction

Cement maker ACC today reported a sharp decline of 69 per cent in consolidated net profit at Rs 102.39 crore for the quarter ended December 31, 2015 despite increase in total income.
The company, which follows January-December as fiscal year, had posted a net profit (after taxes, minority interest and share of profit of associates) of Rs 326.22 crore during corresponding quarter of 2014.
In the year-ago period, the company had tax benefits and other income, as per the BSE filing by the company.
Total consolidated income from operations rose to Rs 2,911.92 crore in the October-December quarter from Rs 2,837.03 crore in the same period a year ago.

Total expenses were almost flat at Rs 2,790.76 crore over Rs 2,726.65 crore in the year-ago quarter.
"Tax expenses are net of credit relating to earlier years, Rs nil for the year ended December 31, 2015, Rs 19,647 lakh (Rs 196.47 crore) for the same quarter," the company said in the regulatory filing.

ACC had other income of Rs 1,930 crore during the quarter under review as against Rs 4,265 crore in the year-ago period.
"Sales volume in the last quarter of the year witnessed a turnaround with an improvement of 4 per cent as compared to the corresponding period of the previous year," it said.

A focus on cost management helped contain overall production costs, it said adding, "this was despite increase in costs due to contribution to the District Mineral Foundation in terms of the provisions of the Mines and Minerals (Development) Amendment Act, 2015, higher rate of royalty on limestone and one-time costs."
The cost of energy, raw materials and packing materials reduced in 2015 over the previous year and a reduction in road traffic freight rates could only partially offset the increase in rail tariffs.
It said a widened customer base, broader product portfolio and good cost management, enabled the company's ready mixed concrete business to remain consistent in registering 28 per cent increase in sales volumes and further improved margins during the year.

ACC said although demand in 2015 was weak, the company
foresees India's economy to move ahead on a recovery path, supported by growth in all major sectors.
"We are optimistic about the outlook for the construction and building materials particularly for cement and concrete - in the next few years, given the government's continued focus on infrastructure development initiatives such as housing for all, smart cities and concrete roads," it said.
ACC has recommended payment of final dividend at Rs 6 per share of Rs 10 aggregating to Rs 136 crore. Thus the total dividend for the year 2015 amounts to Rs 17 per share aggregating to Rs 384 crore.

Regarding a CCI case, the company said it has filed an appeal in the Competition Appellate Tribunal (COMPAT) after the fair trade regulator slapped a penalty of Rs 1,147.59 crore on it based on a complaint by Builders Association of India.
"Allowing the appeal, COMPAT by its order dated December 11, 2015 set aside the CCI order dated June 20, 2012 and recommended the matter back to CCI for fresh adjudication and passing a fresh order as early as possible but not later than three months.
"Further in terms of the order, the company has since received refund of Rs 114.75 crore which was deposited pending COMPAT hearing," it said.

Shares of the company closed at Rs 1269.05 apiece on the BSE, down 0.74 per cent from the previous close.