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Cement maker Heidelberg’s shares slip as profits decline

By Munikoti Rochan

14:56, 19 October 2021

Heidelberg cement truck in Berlin
A Heidelberg cement truck in Berlin, Germany - Photo: Shutterstock

Shares in HeidelbergCement India fell on Tuesday, pulled down by disappointing quarterly earnings.

HeidelbergCement India’s stock finished 3.64% lower at INR248.85 ($3.31) on the National Stock Exchange (NSE), after a company statement showed that rising costs resulted in lower profits for the three months to 30 September.

Profit after tax (PAT) for the period under review was INR595.6m, as against INR686.5m in the preceding quarter and INR624m in the same period a year previously, as per the 19 October regulatory filing.

Meanwhile, total income for the quarter through September was INR5.9bn, compared to INR5.7bn in the previous quarter and some INR5.3bn in the corresponding period of the previous year.

Heidelberg distributed a dividend of INR8 per share as at 30 September, when its net cash balance stood at INR796m.

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Prices hold but costs rise

While sales increased by around 11% year-on-year during the quarter, the average selling price remained flattish. Meanwhile, the company’s operating costs per tonne (including freight) rose 6.7% year-on-year on the back of rising domestic fuel prices and higher packaging costs, the statement added.

The HeidelbergCement Group manufactures and sells products under the ‘mycem’ brand in India. The local arm has a market capitalisation of around INR56.4bn on the National Stock Exchange of India (NSE), where its stock has gained some 10.3% so far this year.

To grow its footprint in India, in 2008 the German maker of building materials bought out its equal partner in the sub-continent, Indorama Cement, after acquiring a controlling stake in rival Mysore Cement in 2006.

Read more: India’s UltraTech Cement reports surge in net sales earnings

 

 

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