2nd UPDATE: Holcim's India Units Post Lower Profit On Depreciation Charges
April 19 2012 - 8:50AM
Dow Jones News
Swiss cement maker Holcim Ltd.'s (HOLN.VX) two Indian units
Thursday posted a drop in net profit for the first quarter as they
booked higher depreciation charges for their power plants due to
changes in accounting rules.
Ambuja Cements Ltd. (500425.BY) reported a 23% fall in net
profit for the January-March period to INR3.12 billion, while ACC
Ltd. (500410.BY) said consolidated net profit slumped 57% from a
year earlier to INR1.52 billion.
ACC recorded a depreciation charge of INR3.35 billion, and
Ambuja took a one-time hit of INR2.79 billion.
Both companies missed analysts' estimates. The average of
estimates from six analysts polled by Dow Jones Newswires had
forecast a net profit of INR4.0 billion for ACC and INR4.43 billion
for Ambuja.
These estimates didn't factor in the one-time charges.
The January-March quarter has been good for Indian cement
companies as sales volume of the building material has risen thanks
to a revival in demand from the construction sector. Prices have
also been raised, largely to offset higher cost of production and
transportation.
Sales at both ACC and Ambuja rose 19% each to INR30.15 billion
and INR26.33 billion, respectively.
ACC's cement sales volume grew 9% to 6.72 million tons, while
Ambuja's rose 10% to 6.05 million tons.
Total costs at ACC increased 20% to INR25.35 billion, which the
company blamed on a steep increase in the price of raw materials
such as coal, fly ash and gypsum. ACC said that a hike in rail
freight costs and higher fuel prices have made it costlier to
transport cement from its factories.
Ambuja's total costs climbed 18% to INR20.09 billion. The
company said that higher cost is expected to keep pressuring its
profit margin in the near term.
- By Prasenjit Bhattacharya, Dow Jones Newswires;
91-11-4356-3358; prasenjit.bhattacharya@dowjones.com