ACC (ACC) Q4 2008 earnings summary

Executive summary

• Cement production reached 20.83 million tonnes, up 4.6% YoY, and sales volume was 21.01 million tonnes, up 5%; domestic slowdown and sharply higher input costs pressured margins.

• Consolidated income rose 11% to Rs. 8,000 crore, while consolidated PAT fell to Rs. 1,100 crore from Rs. 1,427 crore.

• Cost controls, blended cement, alternative fuels and working-capital discipline were emphasized to protect competitiveness and cash generation through the downturn.

Financial highlights

• Standalone gross revenue was Rs. 8,548.48 crore versus Rs. 8,025.81 crore; net sales were Rs. 7,308.62 crore versus Rs. 6,990.68 crore.

• Standalone PBT before exceptional items was Rs. 1,687.74 crore versus Rs. 1,717.18 crore; PAT was Rs. 1,212.79 crore versus Rs. 1,438.59 crore.

• Consolidated PBT before exceptional items was Rs. 1,582.27 crore versus Rs. 1,715.58 crore; PAT was Rs. 1,099.65 crore versus Rs. 1,427.34 crore.

• Exceptional gains were Rs. 48.86 crore versus Rs. 213.11 crore, including land-sale profit of Rs. 12.29 crore versus Rs. 201.43 crore.

• Cement segment sales value was Rs. 7,308.62 crore, up 10.3%; segment EBITDA margin declined to 26% from 31%.

Outlook and guidance

• 2009 demand was expected to depend heavily on government housing and infrastructure stimulus; rural and semi-urban housing demand showed greater resilience than urban demand.

• Capacity projects were scheduled to add 3 MTPA by phases from August 2009 to February 2010; Bargarh expansion was targeted for mid-2009 and the Chanda line for mid-2010.

• Ready-mixed concrete expansion was paused for 2009, with priorities on consolidation, project work in infrastructure and cost reduction amid a contracting market outlook.