More Stories

Informist, Monday, Oct. 28, 2024

--Ambuja Cements Jul-Sept net profit INR 5.01 bln 

--Analysts saw Ambuja Cements Jul-Sept net profit INR 4.07 bln 

--Ambuja Cements Jul-Sept net profit INR 5.01 bln vs INR 6.44 bln 

--Ambuja Cements Jul-Sept revenue INR 42.13 bln vs INR 39.70 bln year ago 

--Ambuja Cements Apr-Sept net profit INR 10.68 bln vs INR 12.89 bln 

--Ambuja Cements Apr-Sept revenue INR 87.29 bln vs INR 87.00 bln 

--Ambuja Cements Jul-Sept clinker sales volume 14.2 mln tn, up 9% on year 

--Ambuja Cements Jul-Sept kiln fuel cost down 13% 

--Ambuja Cements Jul-Sept fuel cost dn; used more low-cost imported petcoke 

--Ambuja Cements expects FY25 cement demand to grow 4-5% 

--Ambuja Cements Jul-Sept consol net profit INR 4.56 bln vs INR 7.93 bln 

--Ambuja Cements Jul-Sept consol revenue INR 75.16 bln vs INR 74.24 bln 

--Ambuja Cements Jul-Sept consol operating EBITDA INR 11.11 bln, dn 15% YoY 

--Ambuja Cements Jul-Sept consol operating EBITDA/tn INR 780 vs INR 995 

--Ambuja Cements Jul-Sept consol operating EBITDA margin 14.8% vs 17.5% 

--Ambuja Cements Jul-Sept sales volume in north at 4.4 mln tn, up 7% on year 

--Ambuja Cements Jul-Sept sales volume in south at 1.5 mln tn, up 13% on yr 

--Ambuja Cements Jul-Sept sales volume in east at 3.3 mln tn, dn 4% on yr 

By Aman Aryan

MUMBAI – Ambuja Cements Ltd. Monday reported better-than-expected Jul-Sept earnings but its consolidated net profit fell 42.5% on year, the highest fall in the last eight quarters, due to an increase in the cost of materials consumed, depreciation and amortisation expenses, and a one-time exceptional expense in the September quarter. Despite posting a higher sales volume on year, the cement maker's earnings were impacted due to a contraction in its consolidated earnings before interest, tax, depreciation, and amortisation margin.

The company's consolidated net profit fell to INR 4.56 billion in the latest quarter from INR 7.93 billion in the year-ago quarter. Analysts expected the company to report a consolidated net profit of INR 4.07 billion. Sequentially, Ambuja Cements' consolidated net profit fell 28.7%.

While the company's sales volume rose 8.4% to 14.2 million tonnes in the September quarter, its consolidated revenue rose just 1.2% on year to INR 75.16 billion. Sequentially, the consolidated revenue fell 9.6%. The company said it has accounted INR 1.38 billion in other operating revenue as an accrued incentive income from its Sankrail unit under the West Bengal State Support Industries Scheme, 2013. During the latest quarter, the Supreme Court rejected the special leave petition submitted by West Bengal Industrial Development Corporation in a similar incentive claim dispute involving the company's Farakka plant, Amuja Cements said. 

The company's other income fell 21.4% on year to INR 3.7 billion in the latest quarter, the highest on-year fall in the last 13 quarters. The company incurred a one-time exceptional expense of INR 1.56 billion which included a provision of INR 1.21 billion made for pending litigation and disputed matters, and INR 350 million for vendor dispute settlement. The INR 350 million settlement expense is related to the cancellation of the coal block allocation, which was supposed to be jointly developed by the company and JMS Mining Pvt. Ltd.

Ambuja Cements' cost of materials rose 20.7% to INR 12.79 billion and its depreciation and amortisation cost rose 44.9% to INR 5.52 billion. This is due to the reclassification of cost of royalty on minerals to 'cost of materials' from 'other expenses', the company said. The company said this reclassification has been given effect from the June quarter. The company's other expenses fell 2.6% on year to INR 9.93 billion in the latest quarter.

The company's power and fuel expenses in the latest quarter fell 2.5% on year and 12.1% sequentially to INR 18.18 billion. The increased use of low-cost imported petcoke and e-auction coal along with the overall reduction in the cost of fuel basket have contributed to a 13% fall in the cost of kiln fuel, used in the production of clinkers, to INR 1.59 per thousand kilocalories from INR 1.82 per thousand kilocalories, the company said. The company said its alternative fuel and raw material consumption in the kiln rose to 9.5% in the latest quarter. 

The company said its revenue for the latest quarter was the highest in the Jul-Sept series in the last five years, driven by higher trade sales volume and an improvement in the share of premium product of trade sales to 26%. The company also said its sales volume for the latest quarter was the highest in the Jul-Sept series in the last five years. The company sold 4.4 million tonnes of cement and clinker in northern India in the latest quarter, up 7% on year, and 1.5 million tonnes in the southern region, up 13%. The sales volume in the central region rose 9% to 1.9 million tonnes and the western region grew 10% to 2.7 million tonnes in the latest quarter. However, in the eastern region, the company's volume fell 4% to 3.3 million tonnes. 

The company's consolidated operating EBITDA fell to INR 11.11 billion in the latest quarter from INR 13.02 billion a year ago and its operating EBITDA margin contracted 270 basis points to 14.8% in the latest quarter. Ambuja Cements said its average EBITDA fell to INR 780 per tonne for the latest quarter from INR 995 per tonne a year ago.  

The company's cement segment generated revenues of INR 72.49 billion in Jul-Sept, up from INR 71.41 billion a year ago. Revenue from the company's ready mix concrete segment, on the other hand, fell to INR 2.95 billion from INR 3.09 billion a year ago. The company said it remains debt free and its net worth rose to INR 599.16 billion during the quarter. Ambuja Cements said its cash and cash equivalents were INR 101.35 billion at the end of September.

The performance of the cement sector was subdued in the first half of the financial year due to the General Elections and a slowdown in construction activity in the monsoon, Ambuja Cements said. The company, however, expects demand for cement to improve by 4%-5% in 2024-25 (Apr-Mar) and said that housing and infrastructure projects will drive future demand for cement. 

The company said its operational capacity is expected to grow to more than 100 million tonnes per annum in FY25 due to its recent acquisition of Orient Cements and projects in an advanced stage of completion. Ambuja Cements plans to increase its consolidated capacity to 118 million tonnes per annum by FY26 and to 140 million tonnes per annum by FY28. The company's current capacity is 89 million tonnes per annum. Currently, the company's market share is 15%, which it plans to increase to 20% by FY28. The company added 70 million tonnes of limestone to its reserves in Jul-Sept with total reserves reaching 8.2 billion tonnes, Ambuja Cements said.

While the company achieved a near 100% capacity utilisation in the central region during Apr-Sept, its capacity utilisation in the western region was only 52%. The central zone accounts for only 8% of the capacity of the company whereas the western zone accounts for 25% capacity share, the highest among the five zones. 

For Apr-Sept, the company's consolidated net profit fell to INR 10.96 billion from INR 16.99 billion in the year-ago period. The company's consolidated revenue fell to INR 158.28 billion in the first half of the current financial year from INR 161.37 billion in the year-ago period. 

The company's standalone net profit fell to INR 5.01 billion for the latest quarter from INR 6.44 billion a year ago. However, the company's standalone revenue rose to INR 42.13 billion for the latest quarter from INR 39.70 billion a year ago. For Apr-Sept, the company's standalone net profit fell to INR 10.68 billion from INR 12.89 billion a year ago and its revenue rose to INR 87.29 billion from INR 87 billion a year ago.

On Monday, shares of the company closed at INR 569.40, up 3%, on the National Stock Exchange, after falling from the day's high of INR 582.25.  End

Edited by Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.