Ambuja Cements (500425) Q4 2007 earnings summary

Executive summary

• 2007 cement sales reached 16.8 million tonnes, up 3% YoY; net sales rose 18% to Rs 5,705 crore, while PBIDT increased 19% to Rs 2,239 crore.

• Performance comparisons in the operating review use calendar 2007 versus calendar 2006; statutory financial statements compare 12 months with a prior 18-month period.

Financial highlights

• Standalone net sales were Rs 5,704.84 crore; profit before tax was Rs 2,712.35 crore and net profit Rs 1,769.10 crore for 2007.

• Calendar-year operating highlights reported PBIDT of Rs 2,238.6 crore versus Rs 1,880.7 crore and net profit of Rs 1,846.1 crore versus Rs 1,435.2 crore.

• Exceptional items were Rs 785.89 crore, comprising Rs 490.07 crore profit on sale of investments/business interests, Rs 325.36 crore property-sale profit and Rs 29.54 crore investment impairment.

• Consolidated net profit was Rs 1,846.11 crore; consolidated revenue was Rs 5,792.08 crore for the 12 months ended December 2007.

Outlook and guidance

• Planned investment of about Rs 3,500 crore will expand clinker and grinding capacity; four grinding units add 5.5 million tonnes per annum, scheduled for commissioning in 2009–10.

• Two clinker projects, each with 2.2 million tonnes per annum capacity, were targeted for 2009 commissioning; combined project investment was estimated at Rs 1,600 crore.

• Industry cement demand was projected to grow at 9.5% CAGR during the 2007–12 plan period; over 110 million tonnes of new capacity was expected industry-wide in 5–7 years.

• An additional 112 MW of captive power capacity was expected in 2008 at an estimated cost of Rs 545 crore; the Kochi bulk terminal was scheduled for early 2009.