India’s ACC reports surprise quarterly loss as expenses surge

Indian cement maker ACC Ltd (ACC.NS) on Monday reported a surprise loss for the September-quarter, hurt by a surge in fuel and power expenses.

The company’s standalone loss was 910.9 million Indian rupees ($11.05 million) for the three months ended Sept. 30, compared with a profit of 4.49 billion rupees a year ago.

“We have had significant cost pressures in the recent past due to steep fuel price rise,” B. Sridhar, chief executive officer, ACC said in a statement, reports Reuters.

“However, recent cooling off in energy costs will impact us positively in the coming quarters.”

Analysts on average had expected the company to report a profit of 1.33 billion rupees for the latest quarter, according to IBES data from Refinitiv.

Total revenue from operations rose 6.3per cent on year to 39.87 billion rupees.

Total expenses for the quarter surged nearly 30per cent due to higher global petcoke and coal prices, with power and fuel expenses surging over 67per cent.

Last week, rival Shree Cement Ltd (SHCM.NS) posted a 67.2per cent slump in second quarter profit after fuel costs surged.

Indian ports-to-energy conglomerate Adani Group recently concluded acquisition of ACC after it ventured into cement making earlier this year with its $10.5 billion acquisition of Holcim AG’s (HOLN.S) cement businesses in India - Ambuja Cements Ltd (ABUJ.NS) and ACC.

Adani, which has become the second-largest cement maker in India, said the production capacity at both the cement units was expected to double by 2027 ($1 = 82.4025 Indian rupees).