ACC (ACC) Q4 2007 earnings summary

Executive summary

• FY2007 delivered record cement production of 19.92 Mt and sales of 19.97 Mt, up 6.4% and 6.1% YoY; consolidated income rose 20% to Rs 7,189 crore.

• Consolidated PAT rose to Rs 1,427 crore from Rs 1,240 crore; results included Rs 201 crore profit on sale of land and gains on investment and undertaking disposals.

• Strategy centered on brownfield capacity growth, operational capability building, clean energy investment and transfer of ready-mixed concrete operations to a subsidiary from Jan. 1, 2008.

Financial highlights

• Consolidated net sales were Rs 7,067 crore versus Rs 5,851 crore; PBT before exceptional items was Rs 1,716 crore versus Rs 1,473 crore.

• Consolidated PAT was Rs 1,427 crore versus Rs 1,240 crore; exceptional gains included Rs 201.43 crore from land, Rs 11.68 crore from investment sales and Rs 16.31 crore from an undertaking sale.

• Standalone gross revenue was Rs 7,977 crore versus Rs 6,595 crore; PBT before exceptional items was Rs 1,717 crore versus Rs 1,459 crore, and PAT after exceptional items was Rs 1,439 crore versus Rs 1,232 crore.

• Standalone sales value in cement was Rs 6,640 crore, up 20.6% YoY; consolidated revenue included Rs 367 crore from ready-mixed concrete.

Outlook and guidance

• Five-year roadmap established with key performance indicators and monitoring; capacity projects were expected to lift cement capacity from 22.4 Mt to ~30.4 Mt by end-2010.

• Planned additions included 0.22 Mt grinding at Madukkarai and 0.60 Mt at New Wadi in 2008; Bargarh and New Wadi expansions in 2009; and Chanda’s ~3 Mt line in 2010.

• Chanda’s 7,000 TPD clinker line and 25 MW captive power plant carried estimated outlay of Rs 1,450 crore, with start-up expected in 2010.

• Industry demand was expected to remain brisk, led by infrastructure and housing; significant capacity additions were anticipated in 2008.