ACC dips into red, makes Rs 59 cr loss

The company’s operating profit also declined by 19 per cent to Rs 212.86 crore for the year ended March 31, 2000.

Shares of ACC were down 2.4 per cent on Wednesday on the BSE in early trades in anticipation of poor results. The scrip closed Rs 7.40 less at Rs 113.50. The company, which was till recently a Tata group company, expects cement demand to grow by 10 per cent in 2000-01 as compared to a 15 per cent growth in the previous year, inspite of only a marginal growth expected in the first quarter.

In the FY 2000, depreciation was higher at Rs 124.51 crore as compared to Rs 103.76 crore on account of commissioning of various projects including captive power plants of 25 mw each at Jamul and Kymore plants. Interest charges were marginally lower at Rs 161.77 crore.

The total income for the year was Rs 2,818.66 crore as compared to Rs 2,747.44 crore in the previous year. Sales volume including traded cement aggregated to 10.72 million tonnes as compared to 9.98 million tonnes inthe previous year.

The directors have decided to recommend a dividend of 10 per cent. The company felt that the cement industry is expected to show a minimum growth of 10 per cent in the current fiscal year while its growth was around 15 per cent in the year 1999-2000. The management is now working on bringing down the cost of production and operation, increase throughput, remove operational imbalances by de-bottlenecking and strengthening the distribution networks.

ACC said that it expected local cement prices to rise in fiscal 2000-01 in the absence of any major capacity expansions. "For the year as a whole, the demand and supply equation seems to be reasonably balanced. With no significant capacities coming up in the near future, it is anticipated that the prices are likely to look up in the course of the year," ACC said.

Analysts said a severe drought in five Indian states since early April is likely to cut into consumption of cement for rural house-building activities, one of the drivers of last year’s industry growth.

The company now plans to divest its non-core businesses to stay focussed on its cement business. The decision, which has been cleared by the company’s board, comes in the wake of the induction of Gujarat Ambuja Cements as a co-promoter with an 11 per cent stake.

The cement maker has, over the years, gone in for diversification into areas like advanced materials, and has pumped in funds into equity of a large number of companies, including Bridgestone ACC India, Floatglass India. The company, has been having large equity exposures in many group companies.

With the change in shareholding in favour of Gujarat Ambuja Cements, the company is now exploring the option of unlocking these investments, for ploughing the same back for its core business of cement.