BENGALURU (Reuters) – Indian cement maker ACC’s first-quarter profit more than doubled, it said on Thursday, as strong demand boost its sales volumes and drove margins higher.
ACC, owned by ports-to-energy conglomerate Adani Group, said profit rose to 4.67 billion rupees ($57 million) in April-June, from 2.22 billion rupees a year ago when high fuel expenses hit results.
Since then, the cost of imported coke and coal, key fuels in cement making, has softened, helping pull down ACC’s power and fuel expenses by 14.3% in the quarter.
And while total expenses rose 10.3%, ACC’s margins on earnings before interest, taxes, depreciation and amortization (EBITDA) still rose to 16.3% from 10.7% a year ago.
The company’s sales volumes increased 24% to 9.4 million tonnes, helping drive revenue 16.4% higher to 52.01 billion rupees.
“The growth was driven by robust demand across all markets,” ACC said, adding that the industry was in a positive “cycle of demand as well as cost factors.”
Indeed, last week rival Ultratech Cement Ltd reported a better-than-expected quarterly profit on strong domestic demand.
The Adani Group’s other cement unit Ambuja is yet to report results.
ACC shares closed up nearly 1% on the day. They have shed about 17% since late January in the aftermath of U.S. short-seller Hindenburg Research’s scathing note on Adani Group. ($1 = 81.9399 Indian rupees)
(Reporting by Sethuraman NR and Navamya Acharya in Bengaluru; Editing by Savio D’Souza)
