Holcim Group companies ACC and Ambuja Cements have reported a lower net profit despite sales registering a substantial increase during the June quarter.

Both the companies follow the calendar year for accounting. ACC's sales during the quarter were up 13% at 5.93 million tonnes (5.27 million tonnes), while Ambuja Cements' fell 2% at 5.29 million tonnes (5.41 million tonnes).

Despite ACC's improved sales volumes and better sales realisations, steep increases in the costs of coal, diesel, freight and other inputs, such as fly ash and gypsum, resulted in lower profits.

Raw material costs for ACC jumped 24% to INR 466 crore. Power and fuel expenses rose by 44% to INR 572 crore (396 crore) on the back of costlier diesel. On the whole, expenditure was up 23% at INR 2,116 crore (INR 1,721 crore). The company has announced an interim dividend of INR 11 a share.

Raw material costs of Ambuja Cement were higher by 1% at INR 146 crore and power and fuel expenses rose 24% to INR 563 crore despite lower sales.

Mr Onne van der Weijde MD of Ambuja Cements said that “The mitigating measures taken in terms of substitution of purchased clinker with in-house production, improvement in electrical efficiencies and improvement in realisation were able to only partly negate the steep increase in input cost.”

(Sourced from BL)