ACC (ACC) Q4 2011 earnings summary

Executive summary

• 2011 sales volumes rose 11.46% to 23.73 million tonnes, ahead of estimated cement-sector demand growth of ~6%; higher input costs pressured operating margins.

• Standalone net sales increased 22.30% to ₹9,438.66 crore; profit after tax rose to ₹1,325.26 crore from ₹1,120.01 crore.

• Consolidated income reached ₹10,428 crore, up 21%; consolidated profit after tax was ₹1,300.80 crore versus ₹1,077.53 crore.

Financial highlights

• Standalone profit before tax was ₹1,540.42 crore versus ₹1,461.45 crore; basic EPS was ₹70.59 versus ₹59.66.

• Operating EBITDA was ₹1,921 crore versus ₹1,812 crore; operating EBITDA margin declined to 20.35% from 23.49%.

• Cement production increased 10.61% to 23.46 million tonnes; dispatches reached 23.68 million tonnes versus 21.17 million tonnes.

• Operating cash flow was ₹1,577 crore versus ₹1,935 crore; year-end cash and cash equivalents were ₹2,832 crore.

Outlook and guidance

• Cement demand was expected to grow 10% in 2012, with capacity additions forecast at ~8% YoY; lower utilization and rising input and logistics costs were expected to keep prices under pressure.

• Robust 2012 consumption was anticipated, supported by infrastructure investment, a normal monsoon and improving rural incomes; India planned ~USD 1 trillion of infrastructure investment in the Twelfth Five Year Plan.

• Ready-mixed concrete outlook remained moderate; 2012 volumes were expected to rely on infrastructure, industrial and retail demand, while commercial and residential demand was expected to weaken.