India: Two of Holcim's Indian subsidiaries have reported rises in their second quarter 2012 profits. Ambuja Cement has reported a 35% growth in net profit for the quarter ending 30 June 2012 due to increased sales, to US$84.6m from US$62.8m in the same period of 2011. Net sales by the company rose by 17.9% to US$463m during the quarter from US$392m in 2011. Ambuja Cement attributed this to a 7.3% rise in sales volume, to 5.54Mt from 5.16Mt.
During the quarter, absolute Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the company rose by 22.8% to US$133m. However Ambuja Cement declared that higher operational expenses impacted upon this rise. Total expenses for the company, including raw material and power costs, rose by 15.7% to US$354m from US$306m. The company expects that profit margins are likely to remain under pressure due to steep rise in cost driven by higher raw material prices and rise in distribution and freight costs.
Meanwhile, ACC has reported a 26% rise in consolidated net profit for the second quarter of 2012 due to strong revenue growth, to US$74.8m from US$59.2m in the same period in 2011. Total consolidated turnover for ACC in the quarter rose by 15% to US$526m from US$458m in 2011. The company sold 6.05Mt of cement during the quarter compared to 5.93Mt in the same period in 2011.
Like Ambuja Cement, ACC mentioned 'steep' escalations in most of its key input costs including slag, fly ash, gypsum and power. The company also commented that the increase in railway freight rates with effect from March 2012 substantially impacted both inward and outward costs.
Both Ambuja Cement and ACC were fined in June 2012 by the Competition Commission of India for their alleged involvement in a price-fixing cartel. Ambuja Cement was fined US$210m and ACC was fined US$207m. ACC is currently taking steps to appeal against the fine.
