Tax write back boosts ACC and Ambuja Cements 1Q, India

Holcim's Indian cement interests, ACC and Ambuja Cements, managed to post an improved first-quarter performance YoY despite a decline in sales, largely due to a writeback of income-tax provisions during the March quarter and an additional depreciation recognised for the March quarter last year.

Both companies, in which the Swiss major holds a 50.3 per cent stake each, follow the calendar year (Jan-Dec) as their financial reporting year. 

India's number two cement producer, ACC, posted a consolidated net profit of 189 per cent to INR4.38bn in the first three months of this year from INR1.52bn in the year ago period, the company said on Friday. Profits rose due to an exceptional item representing additional depreciation charge of INR3.35bn recognised for the March quarter last year and a write back of income tax provision of INR1.41bn in the current quarter, ACC said in a filing to the stock exchanges.

Turnover, however, dropped 2.3 per cent to INR29.11bn in the three months to 31 March, compared to INR29.97bn in the same quarter of the previous year. Sales volumes also fell to 6.42Mt in the 1Q13 compared to 6.72Mt in the 1Q12. "... the industry did not witness the normal seasonal pattern on account of an overall slowdown in infrastructure and general construction segments. The slackening of demand also saw subdued realisations," the company said in a statement.

Meanwhile, India's third-largest cement producer, Ambuja Cements, reported a 56.2 per cent rise in net profit to INR4.87bn from INR 3.48bn in the year ago period. Its profits also rose on account of an exceptional item representing an additional depreciation charge of INR2.79bn in the Jan-Mar quarter 2012 and a write back of income tax provision of INR1.17bn in the current quarter, Ambuja Cements said in a filing to the stock exchanges.

Net sales of the company, however, fell 3.29 per cent to INR25.45bn in the Jan-Mar quarter compared to INR26.31bn in the same quarter previous fiscal 2011-12, it added. Sales volumes declined 4.1 per cent YoY to 5.8Mt. 

Raw materials costs dropped 5.12 per cent to INR1.76bn in the quarter compared to INR1.86bn in the same period of the previous fiscal. Total expenses jumped 5.92 per cent to INR21.24bn in the quarter from INR20.05bn in the year-ago period. During the quarter ended March 31, EBITDA decreased 27.8 per cent to INR5.53bn.