Normal Monsoon will drive demand growth, but high fuel cost to remain a concern for the Cement sector: ACC
Mumbai: Growth in public spending, normal Monsoon and uptick in rural demand is expected to benefit the construction sector, which will drive the cement sector growth. However, the cost pressure will remain mainly due to the high fuel price, estimated cement major ACC Cement.
“The economic upswing in 2018 supported by buoyant consumption, a normal monsoon and uptick in rural demand is expected to benefit the construction sector. We expect cement demand to be positive, driven by the ‘Housing for All ‘ programme, sustained infrastructure spends and rural housing. We anticipate that cost pressures will remain, largely due to a rise in fuel costs as well as other input material costs. ACC will continue to focus on improving efficiencies” said ACC in a regulatory filing.
ACC posts marginal increase in Net Profit
The Cement Major ACC today reported marginal 1% increase in net profit at Rs. 329 Crore in the April-June quarter against 326 in the corresponding quarter last fiscal. Net sales of the company grew by 13% to Rs. 3768 Crore. Cement volume of the company grew by 7% RMX volume witness a growth of 22%.
“We have achieved robust scale in Q2 2018, growing both cement and the ready mix concrete business by 7% and 22% respectively, as well as delivering a consolidated EBITDA growth of 5% YoY. On the other hand, cost headwinds continue, driven by the rise in input material and logistics costs. The positive impacts of our step change in cost management are favorably impacting our financial results. We remain optimistic in our capacity to develop new revenue lines as wellas strengthen our performance in both the cement and ready mix business”, said NeerajAkhoury, Managing Director & CEO.