ACC and Ambuja see slow return to growth

ACC and Ambuja Cements, both part of Holcim, have reported a decline in quarterly sales due to subdued demand and lower cement prices, and expect a slow return to growth as near term challenges persist.

Net profit at ACC, India's second-largest cement maker, halved to INR1.21bn in the July-September quarter. Net sales rose three percent to INR25.1bn. The company expects "gradual but slow improvement in demand.”

Ambuja posted a 45 per cent fall in net profit to INR1.66bn for the quarter ending 30 September. Net sales were down seven perc ent at INR20.05bn.

“The outlook continues to remain challenging due to difficult macroeconomic conditions and resultant subdued demand," Ambuja, India's third-largest cement maker, said in a statement to the stock exchange.

In July Holcim said it plans to restructure its Indian operations to cut costs.

According to reports by Business Standard of India, the national average price of cement during the September quarter was INR21 lower than the same period of last year, and INR9 less than the July quarter of 2013. This has also hurt the profitability of domestic producers  who are facing cost pressured due to higher fuel and freight expenses.