ACC (ACC) Q4 2006 earnings summary

Executive summary

• FY 2006 delivered record results: consolidated income Rs 5,975.79 crore and PAT Rs 1,239.60 crore; prior comparison covers nine months ended Dec. 2005, limiting comparability.

• Cement production reached 18.73 Mt and sales 18.86 Mt, up 10% and 8% respectively versus the prior nine-month period; capacity utilization was 95%.

• Growth was supported by higher volumes, better product mix and realization, efficiency gains, cost reductions and logistics savings.

Financial highlights

• Consolidated net sales Rs 5,851.24 crore, total income Rs 5,975.79 crore, EBIDT Rs 1,779.93 crore and PAT Rs 1,239.60 crore for FY 2006.

• Consolidated profit before exceptional items and tax was Rs 1,463.78 crore versus Rs 435.01 crore in the prior nine-month period; basic EPS was Rs 66.43 versus Rs 28.34, not annualized for the prior period.

• Standalone net sales were Rs 5,803.48 crore and PAT Rs 1,231.84 crore; basic EPS Rs 66.02 versus Rs 30.02 in the prior nine-month period.

• Exceptional items included Rs 144.60 crore profit on land sale, Rs 16.31 crore on sale of an undertaking, Rs 8.27 crore on investment sale and a Rs 13.15 crore prior-period employee-benefit provision.

Outlook and guidance

• Forecast cement capacity rises to ~23.10 MTPA by end-2007 and 27.50 MTPA by end-2009; the New Wadi project is expected to add 3 MTPA in Karnataka.

• Lakheri expansion and 25 MW captive plant were scheduled for Q1 2007 commissioning; Bargarh’s 2.14 MTPA expansion and 30 MW plant were planned for 2008.

• 2007 industry demand was expected to grow 9–10%; RMX expansion into major and Tier 2 cities was a strategic priority.