Sales volume of cement in the third quarter (July-September 2014) was maintained. Total consolidated sales turnover during the quarter was ` 2741.87 crores, up 9 per cent as compared to the corresponding quarter of last year.
Operating EBITDA rose to ` 379.08 crores against ` 286.56 crores in same period of the previous year. Profitability during the quarter showed an improvement as a result of our customer excellence programme and better cost management, particularly with regard to distribution costs & optimized sourcing of inputs and improved realizations.
ACC Mineral Resources Limited (AMRL), a wholly owned subsidiary of the Company, had participated in four Joint Ventures (JV) with the Madhya Pradesh State Mining Corporation Limited (MPSMCL) for development and mining of four coal blocks allocated to MPSMCL. The Company had applied for the development and mining operations through a competitive bidding process, consequent to which the JVs were effected, in which AMRL and MPSMCL hold 49% and 51% shares respectively. The Hon’ble Supreme Court, vide its decision of September 24, 2014, held that allocation of various coal blocks, including those allocated to MPSMCL, is arbitrary and illegal, and hence liable to be cancelled.
Subsequently, the Government promulgated The Coal Mines (Special Provisions) Ordinance, 2014, which intends to take appropriate action to deal with the situation arising pursuant to the Hon’ble Supreme Court’s decision. The management, based on its contractual rights under its JV agreements, its interpretation of the Ordinance and on the basis of legal advice, believes that the financial loss or operational impact, if any, will not be significant.
With prospects of the economy gradually picking up, the infrastructure, housing and construction sectors are expected to register growth in the near term which will have a positive impact on demand for cement.